Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Royal Assent

Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:

1. Consolidated Fund (No. 2) Act 1986
2. Advance Petroleum Revenue Tax Act 1986
3. London Docklands Railway (City Extension) Act 1986
4. River Humber (Burcom Outfall) Act 1986
5. Mersey Docks and Harbour Act 1986
6. British Railways (No. 2) Act 1986

PRIVATE BUSINESS

COUNTY OF CLEVELAND BILL [Lords]

Read a Second time, and committed.

CITY OF LONDON (VARIOUS POWERS) (By Order)

Order for Third Reading read.

To be read the Third time upon Thursday 15 January 1987 at Seven o'clock.

YORK CITY COUNCIL BILL [Lords] (By Order)

Order for Second Reading read.

To be read a Second time upon Thursday 15 January 1987.

Oral Answers to Questions — HOME DEPARTMENT

Commissioner of Police of the Metropolis

Mr. Chris Smith: asked the Secretary of State for the Home Department when he last met the Commissioner of Police of the Metropolis; and what was discussed.

The Secretary of State for the Home Department (Mr. Douglas Hurd): I met the Commissioner yesterday, when we discussed his strategy for next year.

Mr. Smith: Did the Home Secretary take the opportunity to commend the Commissioner of Police of the Metropolis on his commitment to include the issue of domestic violence—assault against women in their own homes—as one of the principal force goals for 1987? However, at the same time, did he take the opportunity to express his disappointment at the apparent lack of urgency that the Metropolitan police seem to have in following up

the recommendations of their own working party on this issue, particularly the pilot project to establish police prosecutions as a third party in an area such as Hounslow? If not, will he do so and stress the urgency and importance of this issue?

Mr. Hurd: We discussed this issue. I welcome what the Commissioner has done to insert this in his strategy. It is a difficult matter for the police, as the hon. Gentleman will recognise. That is why, sometimes in the past, police forces have been hesitant about getting involved in it. We all understand the need for the police to be sensitive and active in dealing with this matter. When we discuss the strategy, and when the hon. Gentleman as a London Member discusses it, he can press home his points.

Mr. Wheeler: Does my right hon. Friend support the Commissioner in his 1987 theme of safety and the citizen? In thinking about that theme, does he congratulate the Commissioner on his determination to reduce racial attacks in London, to improve the prevention and detection of burglary, particularly through the neighbourhood watch schemes, and to concentrate on reducing the number of robberies in certain parts of London, where the problem is of great concern to the citizen?

Mr. Hurd: I agree with my hon. Friend on all those points. I hope that the Metropolitan police will be able successfully to recruit up to the increased establishments that I have given them so that they can meet those tasks. My hon. Friend will have noticed the increased emphasis that the Metropolitan police are giving to dealing with the problem of racial attacks, as I saw for myself in Tower Hamlets last week.

Mr. Tony Banks: Is the Home Secretary aware that the great majority of Londoners want to see the police dealing more effectively with street crime, with the theft of vehicles, with house burglary, with enforcing bus lanes—

Mr. Robert Atkins: Stealing silver.

Mr. Banks: The hon. Gentleman should watch what he is saying. He has a very loose tongue and a wild and silly mind.
Will the Home Secretary realise that such matters as the enforcement of bus lanes and illegal parking on yellow lines are of great concern to Londoners? They would much rather see the police looking after those aspects of law enforcement than being out at Wapping, making sure that scabs get through picket lines and that Murdoch's filthy newspapers get on to the streets of London.

Mr. Hurd: I am not sure about bus lanes, but the hon. Gentleman's point about the futility of tying down so many police at Wapping is right, as I saw for myself last week. I hope that the hon. Gentleman and his hon. Friends will use their influence to ensure that, whatever course this dispute between Mr. Murdoch and his employees takes, it does not continue to force the deployment of so many hundreds of policemen at Wapping.

Mr. Dykes: Will my right hon. Friend during those discussions with the Commissioner talk also about the growing menace of violence in shops?

Mr. Hurd: Yes. That is important. It is one of the themes of our standing conference on crime prevention and one on which I keep in close touch with Baroness Phillips and all those concerned.

Mr. Dubs: Is the Home Secretary aware that the annual crime rate in London is now 200,000 above the 1978 rate when Labour was in office, that that represents an increase of 35 per cent., and that, on average, two London families in five will have among their numbers a victim of crime during the present year? Does the right hon. Gentleman not realise, therefore, that Londoners are contemptuous of the Government's claims that they are doing something about law and order in the capital?

Mr. Hurd: The hon. Gentleman and his hon. Friends make no mileage with that kind of point, and I shall tell them why. They try occasionally to clamber aboard our policies—for example, on crime prevention and victim support—but, on the whole, people in London associate them with those boroughs in London the Labour leaders of which concentrate on undermining and abusing the police.

Sir John Biggs-Davison: Will my right hon. Friend consider with the Commissioner the policing of Waltham Abbey, where regular fights between youthful gangs now aflict that formerly peaceful town? Is it not the case that there are no more police on the streets now than there were in the 1920s? Is my right hon. Friend satisfied with the strength and the establishment of the Metropolitan police?

Mr. Hurd: I am not satisfied with the Metropolitan police strength, because they are 600 below the establishment which I have authorised. One of their main tasks in the coming year is to recruit and keep the officers necessary to reach the increased establishment which I have set. They are going all out to do that. The more the Metropolitan police can do that, the more police officers there will be, particularly in the outer London boroughs, which I readily recognise suffer from the inevitable, and right, concentration which the Commissioner has decided to deal with some other problems in the more acute areas.

Birmingham Pub Bombings

Miss Maynard: asked the Secretary of State for the Home Department if he has anything to add to his Department's earlier statements regarding the formula used for the Griess test carried out by Dr. Frank Skuse in the case of the six men convicted of the Birmingham pub bombings; and if he will make a statement.

Mr. Corbyn: asked the Secretary of State for the Home Department, pursuant to the reply to the hon. Member for Newham, North-West (Mr. Banks) of 20 November, Official Report, column 288, what information he has regarding evidence dating from 1975 that the strength of the caustic soda solution used by Dr. Frank Skuse to test the men subsequently convicted of the Birmingham pub bombings for nitro-glycerine was 1 per cent.; and if he will make a statement.

Ms. Clare Short: asked the Secretary of State for the Home Department what procedure is used by his Department's forensic scientists to record details of tests carried out in criminal cases.

Mr. Madden: asked the Secretary of State for the Home Department what meetings (a) he, and (b) his officials have had with Dr. Frank Skuse since his retirement, to discuss Dr. Skuse's role in the case of the six men convicted of the Birmingham pub bombings.

Mr. Skinner: asked the Secretary of State for the Home Department what recent discussions the director of

his Department's laboratory at Chorley has had on the case of the six men convicted of the Birmingham pub bombings.

The Minister of State, Home Office (Mr. David Mellor): As part of our review of this case we arranged for a reappraisal of the Griess test to be undertaken by the Aldermaston forensic science laboratory. It was not clear from the papers what strength of caustic soda solution Dr. Skuse used and whether or not he used ethanol. I understand that the practice is for observations, tests, results and conclusions to be recorded, but that there was no reference to these two points in the notes which Dr. Skuse made in this case.
We have sought written and oral clarification from Dr. Skuse about his method. In two telephone conservations in January 1986, with the controller of the forensic science service and the present director of the Chorley laboratory, Dr. Skuse said that he had used a 0·1 per cent. strength solution of caustic soda and that he thought that he had not used ethanol. The belief that he had used a 0·1 per cent. solution was supported by a guidance note which Dr. Skuse had written, which referred to the use of a solution of this strength, and which he circulated in January or February 1975.
It appeared therefore that the then director of the Chorley forensic science laboratory had been in error in informing Mr. Baldock in May 1985 that Dr. Skuse had used a 1 per cent. solution.
However, Dr. Black, who gave evidence at the trial, has recently said that his recollection is that Dr. Skuse indicated to him in May 1975 that the solution strength was 1 per cent. The then director of the Chorley forensic science laboratory has also said that the information that he gave to Mr. Baldock was based on information given to him by Dr. Skuse.
The Aldermaston re-appraisal of the Griess test made allowance for these uncertainties by conducting tests using differing strengths of caustic soda solution with and without the use of ethanol.
My right hon. Friend is continuing to consider the various representations made to him, including the material submitted by my hon. Friend the Member for Harborough (Sir J. Farr) following the "World in Action" programme on 1 December. He intends to reach a decision shortly.

Miss Maynard: Will the Minister confirm that the retirement of Dr. Skuse at the age of 50 was far from voluntary and that he was sacked on the grounds of "limited effectiveness"? Is not this matter being hushed up to avoid a scandal?

Mr. Mellor: No. I utterly reject any suggestion that this matter has been hushed up. Full disclosures have been made of such facts as we are able to make prior to my right hon. Friend reaching his decision. In relation to the position of Dr. Skuse, it is right—and we have always made this clear—that he was retired on grounds of limited efficiency. However, it must be said that that was limited efficiency at the time that he was retired, not limited efficiency in 1975.

Mr. Corbyn: Will the Minister confirm that in May 1985, his office believed that the records at Chorley were accurate, but in September 1986, in a letter to the hon. Member for Aldridge-Brownhills (Mr. Shepherd), the


Minister said that there was some doubt about the accuracy of those records? Does he believe that that warrants an inquiry into what is happening in the Chorley laboratory? Does he think that someone in the laboratory is being "economical with the truth" about the evidence of those tests?

Mr. Mellor: The full investigations that have been made at the laboratory have certainly revealed matters that are a cause for concern about the record keeping in this case. The adequacy of those records and the consistency or otherwise of some of the matters set out therein, is a prime point that my right hon. Friend is considering in the context of further action to be taken in this case. Many changes have taken place since 1975 in the forensic science service in the manner in which these tests are carried out and recorded. We are satisfied with the efficiency of the forensic science service in those respects at present.

Ms. Clare Short: While we are pleased that the Minister will review the procedures at Chorley—it is shocking that written records were not kept in such a crucial case—does he accept that the major concern is the six men involved, who received 21 life sentences for an offence which they probably did not commit? Will the Minister give us an assurance today that if there is any doubt he will take the percentage that is most beneficial to those men, particularly given that Dr. Black's records from the time—the one man who had a record—show that it was a 1 per cent. solution?

Mr. Mellor: Of course, I give the hon. Lady the assurance that these matters are being considered seriously. Anything that tends to suggest that there is new evidence or new considerations of substance that were not before the court in 1975, and which cast doubt on the safety of the conviction, would provide a basis for my right hon. Friend to refer the matter back to the Court of Appeal. My right hon. Friend has a difficult decision to make. Information is still coming in and, indeed, earlier this week we received a full statement of an interview that the police had with Mr. Clarke. My right hon. Friend will consider the papers carefully and personally over the next few weeks and he intends and hopes to announce his conclusions early in the new year.

Mr. Madden: Will the Minister confirm that the trial judge placed great emphasis and importance on the forensic evidence and the confessions? Will he further confirm that the forensic evidence and confessions have been found to be fundamentally flawed? In the name of humanity and justice, as those men now face their 12th Christmas and new year in prison, will he take this opportunity to say that the Government have decided to refer the case to the Court of Appeal so that all the matters can be looked at afresh?

Mr. Mellor: The hon. Gentleman has plainly reached his own conclusions about the matter. It is not for me to join him in a rush to judgment on these issues. It is for us to determine, as I have already said, whether there is new evidence or considerations that entitle others, whose task it is within the criminal justice system, to consider whether matters have proceeded properly and to re-examine those matters. That is what we are doing. I must tell the hon. Gentleman, as I told other hon. Members last month, that is not the least bit reassuring that some hon. Members

seem to believe that we in this House, and not the court, should reach conclusions about guilt or innocence. It is a matter for the courts.

Mr. Skinner: The Government's representatives are not much good when they come under cross-examination of one kind or another, are they? Is it not a fact that Dr. Frank Skuse, who represented the Government, was about as convincing as Sir Robert Armstrong was in Australia? Does the Minister recall another forensic scientist, Dr. Clift, whose name was bandied about this building for about three years, until eventually a Tory Minister had to recognise that the campaign against Dr. Clift's forensic evidence would result in some people being released from gaol? Why does the Minister not acknowledge that fact now instead of engaging in a cover-up?

Mr. Mellor: As usual, the hon. Gentleman throws allegations around. I regret that he feels it necessary to turn every issue into a partisan one. In so far as Dr. Skuse was representing any Government when he gave evidence at the trial, it was a Labour Government.

Mr. Richard Shepherd: Why is it that since the resignation of Dr. Skuse the Home Office has not questioned him directly on his methodology? He says that he wants to make available all the information that he has, that the case notes are full, that as recently as January they were in the possession of Chorley and that they would show the methods and detail he used in the application on that night in November 1974.

Mr. Mellor: Repeated attempts have been made to get full explanations from Dr. Skuse, but they have not peen successful. I can give my hon. Friend chapter and verse about that.

Mr. Robert Atkins: Whatever the rights and wrongs of the case, does my hon. Friend agree that it would be invidious for all the staff who work at the forensic laboratory at Chorley, where some of my constituents are employed, to be tarred with the brush, as the Opposition seem to be doing, that somehow everything is wrong at Chorley and the staff do not do a remarkably good job on behalf of those who need their advice?

Mr. Mellor: I entirely agree with my hon. Friend. The willingness of some Opposition Members to traduce a whole group of people because of the alleged inadequacies of one is hardly reassuring for their reputation on maintaining law and order.

Mr. Alton: Given the Minister's admission about the lack of co-operation, why has he not taken steps to have the notebooks and case records impounded and made available to the lawyers representing those who are in gaol? How is it possible for a scientist to be almost certain about the formula that he used?

Mr. Mellor: The hon. Gentleman is labouring under a misapprehension. The notebooks and other articles are available and are forming part of the re-examination that is taking place.

Mr. Alton: Will the Minister make the papers available now?

Mr. Mellor: The hon. Gentleman should listen to my answer instead of asking further questions from a sedentary position. If my right hon. Friend the Home Secretary decides to refer the matter to the Court of


Appeal, any material relevant to the appeal and its proper prosecution will be made available. That is the situation and that is how it has always been.

Crime Prevention

Mr. Boyes: asked the Secretary of State for the Home Department what further proposals he has to reduce the incidence of crime.

Mr. Hurd: The latest figure for police strengths in England and Wales is a record of 121,841. Spending on the police in real terms has increased by about 50 per cent. since 1978–79. Further expansion is under way. Crime is best reduced by involving all those who can help in its prevention. At the standing conference on crime prevention last month we gave new impetus to our plans, which include, strengthening crime prevention as an element within the policies of all Government Departments, stimulating further practical local activities, such as the five local projects already in place, encouraging the private sector to join more fully in crime prevention, and developing measures to prevent crime among children and young people.

Mr. Boyes: Is the Home Secretary aware that businesses and householders in my constituency are becoming increasingly insecure because of the ever-growing incidence of theft and robbery? Because of the lack of Government action my constituents are becoming increasingly worried and frightened. If the Home Secretary does not understand that, I invite him to come to my constituency and meet representatives of the many groups who have been to see me over the past few weeks. My constituents think that the Government do not care.

Mr. Hurd: Obviously, there is anxiety about the growing crime figures, as there has been for many years. As people understand the depth and width of our policies and the greatly increased resources that we are providing, whether for crime prevention, victim support, the police or the criminal justice system, they will see that our record compares admirably with anything that has gone before.

Mr. Hind: During the course of his busy day, will my right hon. Friend take the opportunity to consider the reports about the case of Michael Hicks, an official of SOGAT '82, who was convicted at Southwark Crown court last week of an offence of actual bodily harm at the Wapping printing plant? Will my right hon. Friend also note that Mr. Hicks was sentenced to 12 months' imprisonment? Yesterday, however, the national executive of the Labour party voted, unanimously, to call for his release. Will my right hon. Friend give us an undertaking that, during the course of his administration, those who commit offences of violence, whether for political or other reasons, will be treated in exactly the same way?

Mr. Hurd: I was amazed to see the report about the Labour party that my hon. Friend mentions, and I hope that the right hon. Member for Manchester, Gorton (Mr. Kaufman) will throw some light on it. Is it that the Labour party has evidence that suggests that this conviction of Mr. Hicks was unsafe, or is it that it believes that, as an office bearer in a trade union, he is entitled to assault police officers and get away with it?

Mr. Kaufman: With regard to the incidence of crime, is the Home Secretary aware—

Mr. Peter Bruinvels: Crime? The hon. Gentleman does not condemn it.

Mr. Kaufman: Yes, crime which Conservative Members do not care about.
Is the right hon. Gentleman aware that, in Britain, in the week between now and Christmas there will be 640 robberies, 2,500 crimes of violence against the person, 2,700 frauds, 12,000 acts of criminal damage, 19,000 burglaries, 42,500 thefts and 80,000 crimes of all kinds. Is it surprising that 83 per cent. [HON. MEMBERS: "Too long."] Yes, the Government's criminal record is too long. Is it surprising that, in the latest opinion polls, 83 per cent. of the electorate say that the Government have broken their promises on law and order?

Mr. Hurd: Every opinion poll on this matter that I have seen gives the public verdict that our policies on this matter are, by a long stretch, more credible than those of the Labour party. This afternoon, we can understand why the right hon. Gentleman produces his familiar litany and why, as a spokesman of a party that claims to be interested in law and order, he has completely failed to comment on or repudiate the point raised by my hon. Friend the Member for Lancashire, West (Mr. Hind). Until he does so, he loses all credibility.

Sir Eldon Griffiths: Will my right hon. Friend not allow the right hon. Member for Manchester, Gorton (Mr. Kaufman) to get away from the point about the NEC's condemnation of a judge and jury when they found guilty a man who had violently assaulted a member of the Metropolitan police? Will my right hon. Friend say how it helps in the fight against crime, which ought to concern all parties, when the Leader of the Opposition lends his name to an attack on a court of law because it has found guilty a man who violently attacked a police officer of the Metropolitan police?

Mr. Hurd: It is not a matter of letting the right hon. Gentleman to get away from the point; he has not got on to it yet, though it is absolutely relevant to his pretensions and to his questions on this matter. As my hon. Friend says, the pursuit and prevention of crime must be a matter for the whole community and all political parties. The Labour party cannot be allowed to pick and choose between offences it condemns and those from which it thinks its friends should be exempt.

Neighbourhood Watch Schemes

Mr. Patrick Thompson: asked the Secretary of State for the Home Department what plans he has for stimulating the further development of neighbourhood watch schemes.

The Parliamentary Under-Secretary of State for the Home Department (Mr. Douglas Hogg): There are already some 17,500 neighbourhood watch schemes in England and Wales. This clearly demonstrates the public's willingness to be involved in positive crime prevention activity. The first national neighbourhood watch conference took place on 8 December, which was also the day on which we launched a new quarterly magazine Good Neighbour. Together, these will help to disseminate ideas, good practice and projects to encourage further development of neighbourhood watch.

Mr. Thompson: I thank my hon. Friend for his reply and for the support that his Department is giving to home


watch schemes in Norfolk, especially in my constituency, where good progress is being made. This must be one of the good, practical ways in which to deal with crime, especially where elderly people who feel under threat are concerned. Can my hon. Friend find ways in which to increase further liaison between police officers and the community and to publicise these matters further, especially in East Anglia, through the Magpies programme?

Mr. Hogg: I am grateful to my hon. Friend for his support. During the past six months, 10 new schemes became operational in his area and five more are setting up. I entirely agree with my hon. Friend about communication. That is why we held the standing conference and why we have the new magazine.

Mr. Janner: Although I welcome neighbourhood watch schemes, does the Minister recognise that they are no substitute whatever for having enough policemen on the beat, and that people in my constituency are afraid to go out at night because of what can happen to them on the street and because they do not want to leave their homes empty? When will the Minister provide enough policemen on the beat and stop refusing the Leicestershire police force the policemen it requires and has asked for so that it can be properly staffed?

Mr. Hogg: That is a singularly unattractive question from a member of the Labour party.

Mr. Janner: It is just that the Minister does not like it.

Mr. Hogg: Since 1979, manpower available to the police service has increased by about 15,000. Since 1979, we have spent more than 38 per cent. more in real terms on the police. I remind the House that when the Labour party was in power the police were grossly underpaid and left the force in droves.

Mr. Watts: Is my hon. Friend aware that the recent increase in the approved establishment of the Thames Valley police is extremely welcome as it provides an opportunity for the further development of community watch schemes and other measures to combat crime? Is my hon. Friend further aware that the antics at Greenham Common, supported by the Labour party to the hilt, are a serious drain on the manpower available to the force and divert its efforts away from the detection of crime and the arrest of criminals?

Mr. Hogg: I welcome what my hon. Friend has said. I am grateful to him and other Conservative colleagues for the way in which they have put the arguments in support of the Thames Valley application for an increase in establishment, which we have been able to meet. My hon. Friend has suggested that the demands of Greenham Common undermine the capacity of the Thames Valley police to respond. Who supports the people who are demonstrating at Greenham Common? I will tell you, Mr. Speaker. The Labour party supports Greenham Common demonstrators.

Mr. Soley: I wonder whether the Minister would like to co-operate with me in setting up a neighbourhood watch scheme in the House to find out how many times the Secretary of State for the Environment has broken the law. What will he do, that is effective, about crime prevention, over and above the cheap option of neighbourhood watch? We all know that it is the cuts in

caretaker provision and other forms of crime prevention that have pushed the crime rate up and that it is the Government who have done that with the full co-operation of the Secretary of State for the Environment, who has a lot to answer for, besides his breaches of the law.

Mr. Hogg: I shall be very pleased to set up a neighbourhood watch scheme in the House, because we would then begin to identify which Labour Members supported the demonstrations at Grunwick, which Labour Members stand on the Wapping picket lines and which Labour Members persistently encourage those who riot and abuse the police. We should certainly have a neighbourhood watch scheme, and we know who will be found out.

Mr. Nicholas Winterton: Major Hugh Thornburn of Alderley Edge in my constituency has been in the forefront of the development of neighbourhood watch schemes. Does my hon. Friend, who clearly supports neighbourhood watch schemes, accept that an additional modest resource is necessary if the co-operation of the police with the development of neighbourhood watch is to exploit the maximum co-operation of ordinary lay men and women in society in combating crime?

Mr. Hogg: My hon. Friend makes a valuable point, but I re-emphasise to the House that, since 1979, this Government have increased spending on the police service by more than 38 per cent. in real terms. It is for chief constables to determine how they allocate their expenditure within their budgets.

Crime (Costs)

Mr. Norman Atkinson: asked the Secretary of State for the Home Department if his Department has ever attempted to estimate the total economic cost of crime; and if he will make a statement.

Mr. Mellor: No, Sir. We know the cost of the criminal justice system and the value of goods stolen in the course of certain types of crimes, but an estimate of the total costs of crime could not readily be made.

Mr. Atkinson: Does the Minister agree that many authorities, and some in the Home Office, subscribe to the view that crime costs about £16 billion to £17 billion a year? That being the case, does the Minister agree that the majority of preventable crime takes place during the hours of darkness? If so, will he agree to the funding of a limited number of experimental control schemes using artificial lighting for the purpose of demonstrating that lighting engineers have part of the remedy for preventable crime during the hours of darkness?

Mr. Mellor: The hon. Gentleman has made a good point. We are considering ways of tackling crime by trying to prevent it. He knows that a range of initiatives are going forward in different parts of the country, drawing on money under the urban programme, and on manpower from the MSC, which seek to engage many different groups. I shall certainly take the hon. Gentleman's point seriously.

Mr. Corbett: May I invite the Minister to think again about this issue, because, clearly, if some sort of sensible estimate could be made, it would bring home to all the importance of this matter? Will the Minister think about the cost of fear? As my hon. and learned Friend the


Member for Leicester, West (Mr. Janner) mentioned, the fear that keeps people locked in their homes influences jobs and revenue-generating activities. Will the Minister think again about that?

Mr. Mellor: If I may say so again, the points that the hon. Gentleman has made are important and do not need to be used as a prop to argue in favour of getting some sort of inevitable guesstimate. The points made about the fear of crime are particularly significant because, unquestionably, as the British crime survey discovered, the fear of crime is an evil in itself and needs to be tackled. As has been said, many people allow themselves to be locked up in their homes when there is no good reason for that. Part of the reason why we are returning so many police officers to the beat is to try to stimulate confidence in neighbourhoods where that is entirely appropriate.

Justices' Clerks

Mr. Maclennan: asked the Secretary of State for the Home Department what representations he has received about his decision not to propose changes in the qualifications provided for by the Justices Clerks (Qualifications of Assistants) Rules 1979.

Mr. Mellor: Representations have been made orally on behalf of the Justices' Clerks Society. No others have been received.

Mr. Maclennan: Why has the Minister set his face against the requirement that all court clerks in the magistrates' courts should have professional qualifications? In view of the increasing complexity of the law, the volume of work in the magistrates' courts and the extension of legal aid, is not the quality of advice offered of very high importance? Is the Minister aware that the Law Society, the Bar Council and the Magistrates Association support this reform? Why is he against it?

Mr. Mellor: The hon. Gentleman is right. The quality of advice tendered to justices in magistrates' courts is important. Indeed, as the hon. Gentleman would, in all fairness, wish to admit, a number of those who may not be qualified as barristers or solicitors but who hold diplomas in magisterial law have been offering extremely good advice to magistrates' courts up and down the country for many years. Indeed, the magistrates' court system in this country runs with more than two thirds of the clerks so qualified. Only one third are legally qualified. We do not believe that the tremendous efforts and the large resources that would be needed to move to a fully professional justices clerks' profession could be justified at this time against so many competing priorities.

Local Government Reform (Voluntary Groups)

Mr. Simon Hughes: asked the Secretary of State for the Home Department what representations he has received from voluntary groups concerning problems encountered following the abolition of the metropolitan local authorities.

Mr. Mellor: None, but we are keeping in touch with developments as they may affect the funding of voluntary groups in the areas concerned.

Mr. Hughes: Does the Minister realise that there is increasing concern among voluntary bodies in the six former metropolitan counties and in London, which are

partly funded by the Department, and which are at risk of having their buildings transferred over their heads in a way that will substantially increase their rents, rates and other running costs? At the end of the day, there is no net advantage to the Exchequer. Will the Minister hold discussions with the relevant residuary bodies in order to protect worthwhile voluntary organisations from the unnecessary and unjustified increases that are believed to be in the pipeline?

Mr. Mellor: The hon. Gentleman has made a cogent case, as I would expect of him, and I shall look carefully at what he has said.

Mr. Favell: Given the furore when the metropolitan counties were abolished, what conclusion does my hon. Friend draw from the fact that he has received no representations whatever from voluntary bodies expressing concern about what has happened since?

Mr. Mellor: I can only speak from a Greater London perspective, but the entirely spurious ratepayer-funded GLC campaign, which tried to instil in Londoners the belief that civilised life in London would come to an end with the GLC's demise, has been shown to have been totally and utterly without merit.

Mr. Ashley: Is the Minister aware that there is abundant evidence that many voluntary organisations will be badly hit unless he takes action very quickly?

Mr. Mellor: Action is being taken. The Government have made substantial sums of money available in order to allow transitional support for such bodies, but it was always anticipated that some voluntary bodies that were funded by organisations such as the GLC on an entirely reckless basis, right at the end of their mandate, and in a way calculated to try to embarrass successor authorities, would not continue to be so funded. That was inevitable and is not necessarily at all undesirable.

Subversion

Dr. McDonald: asked the Secretary of State for the Home Department whether he has any plans to amend the law so as to provide for a statutory definition of subversion.

Mr. Hurd: No, Sir.

Dr. McDonald: If the Home Secretary does not intend to amend the law, will he at least confirm that subversion means unlawful activity that is directed at the overthrow of a parliamentary Government and does not mean views that are unacceptable to a particular Government?

Mr. Hurd: The definition was given for the first time by the Minister of State in the previous Labour Government, Lord Harris, on 26 February 1975. That definition of subversion is
activities … which threaten the safety or wellbeing of the State, and which are intended to undermine or overthrow Parliamentary democracy by political, industrial or violent means."—[Official Report, House of Lords, 26 February 1975; Vol. 357, c. 947.]

Mr. Soames: Does subversion include the undermining of the Crown's case in a court overseas?

Mr. Hurd: I think that I had better rely on the text that I have read out, which has held since 1975.

Mr. Heffer: Has the right hon. Gentleman yet had a chance to read Mr. Hugo Young's comments in The


Guardian today, suggesting that people in the Conservative party, including the Prime Minister and just about every member of the Cabinet, believe that members of the Labour party are subversive—[Interruption.]—agents for the Soviet Union and traitors? Why do Conservative Members not cheer, as that is exactly what they think? Is it not about time that they recognised what every organisation in Europe recognises, which is that the Socialist movement in Britain is rooted in the British people and is less subversive than are Conservative Members, because they want to sell our country and our people to the United States of America?

Mr. Hurd: I have read the article, and I thought it was a wild article by a usually reasonable journalist. I am not surprised that it has inflamed the hon. Gentleman.

Dangerous Weapons

Mr. Canavan: asked the Secretary of State for the Home Department whether he will take steps to seek to ban or further restrict the sale of dangerous weapons.

Mr. Douglas Hogg: The Firearms Act 1968 already lays down strict controls on the possession and use of firearms and we have no plans at present to amend it. With regard to other weapons, we announced on 3 December that we intend to issue guidelines to traders urging that crossbows should not be sold to persons under 17. We are in favour of a statutory prohibition of this kind and the Bill which my hon. Friend the Member for Leicester, East (Mr. Bruinvels) has introduced will seek to do this. We keep the whole subject under active review.

Mr. Canavan: Is it not obscene that some unscrupulous traders sell to children, as Christmas presents, dangerous, illegal weapons such as flick knives, spiked gloves and Chinese death stars? Is it not about time that the Government took firm action to outlaw such a barbaric practice, which is exploiting children and encouraging violence in the streets?

Mr. Hogg: I imagine that the hon. Gentleman will be supporting the Bill on crossbows, and I hope that he will be applauding the guidance that the Government have given about the sale of martial arts equipment and crossbows to young people.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Andrew F. Bennett: asked the Prime Minister if she will list her official engagements for Thursday 18 December.

The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in this House I shall be having further meetings later today.

Mr. Bennett: Will the Prime Minister join me in congratulating Henry Simon Ltd. of Stockport on winning a contract for a new flour mill in China, worth £1·8 million? Is it not distressing that city slickers have now set up a company, Valuedale, to asset-strip the Simon group? Is she not ashamed of the fact that she has created the greed society, and will she apologise to the British people?

The Prime Minister: I am always willing to congratulate firms which have gained export contracts and wish them well. If the hon. Gentleman has any comment about any particular firm, he must make it to my right hon. Friend the Secretary of State for Trade and Industry.

Sir Anthony Meyer: Could my right hon. Friend find a moment today to reflect on the problem of public finance and Opposition parties, and in particular on the fact that the Liberal party, in criticising the way that hon. Members have voted in certain Divisions, appears unable to discover the fact that my hon. Friend the Member for Conwy (Mr. Roberts) is a member of the Government, so it would be normal for him to vote with the Government?

The Prime Minister: My hon. Friend made his point well, and grafted it on to a suitable question.

Mr. Ashley: asked the Prime Minister if she will list her official engagements for Thursday 18 December.

The Prime Minister: I refer the right hon. Gentleman to the reply that I gave some moments ago.

Mr. Ashley: Is the Prime Minister aware that many hon. Members will welcome the decision by the Secretary of State for Defence to repeal section 10 of the Crown Proceedings Act, thus giving the disabled service men of today and tomorrow the right to sue for adequate compensation? Is she further aware that there can be no justification for the Secretary of State's mean-minded attempts to deny the same righs to the disabled service men who served in the atom tests of yesterday? Will the Prime Minister please intervene?

The Prime Minister: I am grateful for what the right hon. Gentleman said in the first part of his question. With regard to the latter part, it is either the subject of a case or under consideration.

Mr. Cormack: Will my right hon. Friend take a little time this afternoon to invite the Leader of the Opposition to her room for a bit of Christmas cheer? Will she then, on Privy Council terms, explain to him that there is no point in spending money on an early warning system unless we are prepared for the warning?

The Prime Minister: Once again, my hon. Friend makes his own point very effectively in his question.

Mr. Merlyn Rees: Despite the humour in the House when my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) asked a question, will the Prime Minister read carefully the article by Hugo Young that appeared today in The Guardian? He states that a former Tory Cabinet Minister told him that he was provided with documents that contained security information about prominent members of the Labour party and that he was told by the same Cabinet Minister that he hoped that "Denis Healey"—my right hon. Friend the Member for Leeds, East, whom I first met on the beaches at Anzio—[Interruption.] That is not a laughing matter. He said he was told that the Minister hoped my right hon. Friend would be found dead on the pavement in the morning, killed by an unauthorised group. Fantastic as it sounds, because of what we have learnt about the man Wright, whom I dislike as much as the Prime Minister—and I hope that he does badly in Australia—when the case is over, Wright ought to be brought to account, with others,


so that we can find out whether there is anything in this article, or whether it is pure moonshine. Is it pure moonshine?

The Prime Minister: As the right hon. Gentleman knows, I am not responsible for what is written in press articles. He knows full well that I can make no comment with regard to the conduct of the Wright case.

Mr. Sims: Will my right hon. Friend find time today to congratulate the Post Office on the efficient manner in which, at the busiest time of the year, it handled and delivered 5 million letters of acceptance to British Gas shareholders? Will she also take the opportunity to remind those 5 million shareholders and their relatives of what would happen to their shareholdings if Labour came to power?

The Prime Minister: Yes, I gladly join my hon. Friend in congratulating the Post Office on the efficiency with which it dealt with those 5 million letters. I remind the shareholders, or potential shareholders, that if the Labour party came to power they would never have the opportunity they have now and that they might be deprived of their right to equity shareholding.

Mr. Rogers: asked the Prime Minister if she will list her official engagements for Thursday 18 December.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Rogers: I am sure the Prime Minister is aware that in my constituency and in the constituency of every hon. Member there are memorials to those who have given their lives for this country. I am also sure the right hon. Lady agrees that it is appropriate that at this time we should remember them and their families. Does the right hon. Lady also agree that patriotism and loyalty do not belong to any particular group or class or to any particular party?

The Prime Minister: As far as I am aware, the hon. Gentleman has said nothing with which I disagree.

Mr. Churchill: Will my right hon. Friend explain to the CND fanatics on the Opposition Benches, in particular to the Leader of the Opposition, that in the nuclear age there is no such thing as a secure, non-nuclear defence? Is it not clear that, although they may try to conceal the fact from the British electorate, their only response, in the event of a nuclear threat or nuclear attack, would be the capitulation of this island to the gaolers of the nations of eastern Europe and to the butchers of the Afghans?

The Prime Minister: Yes, I believe that an effective defence needs an effective nuclear deterrent. Without it we could not fight the potential aggressor who had a nuclear deterrent. I note what my hon. Friend said about Afghanistan, which has been occupied for just about seven years—for longer than the whole of the last war.

Mr. Maclennan: asked the Prime Minister if she will list her official engagements for Thursday 18 December.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Maclennan: Has the Prime Minister read the latest criminal statistics, which show that, despite the determined efforts of the police to clear up crime, the number of crimes not being cleared up is increasing at a greater rate than before? Has she noticed that the offence of robbery and

serious offences of violence against the person increased last year by more than 10 per cent? Because the Criminal Justice Bill will do nothing to reverse these alarming trends, what proposals has the Prime Minister in mind to halt this inexorable rise in crime?

The Prime Minister: Unfortunately, crime has been rising steadily for a number of years. The hon. Gentleman must be pleased that the Government have put more and more into the police service in personnel and in equipment. He will also be pleased that my right hon. Friend the Home Secretary has a vigorous campaign for crime prevention. The hon. Gentleman must be aware that we cannot tackle and beat crime without the wholehearted support, not only of hon. Members, but of everybody in society.

Mr. Budgen: In the light of the recent epic and historic reform of the common agricultural policy, will my right hon. Friend confirm that there will now be no need for any additional payments to the EEC?

The Prime Minister: I am glad that my hon. Friend is pleased with the work done by my right hon. Friend the Minister of Agriculture, Fisheries and Food, who has been quite outstanding in his skilful piloting of the latest Agriculture Council and the Fisheries Council. I hope that what my hon. Friend says is true. I have not looked at all the details of the financial arrangements, but they are clearly designed substantially to reduce the cost of the common agricultural policy.

Mr. Kinnock: Does the Prime Minister recall that at the time of her first Christmas in office 3½ million adults were on supplementary benefit and 1 million children were in families dependent on supplementary benefit? This Christmas over 5 million adults are in that position and over 2 million children are in families dependent on supplementary benefit. By any measure that is a huge increase in poverty. Is the Prime Minister not absolutely ashamed of her record?

The Prime Minister: The right hon. Gentleman is aware that supplementary benefit is meant to provide for those who are in need. Not only does it do so, but it does so on a more generous scale than under previous Governments. As he is aware, when supplementary benefit rises the number of people in poverty goes up—if that is his definition of poverty.

Mr. Kinnock: I wish that the right hon. Lady's reference to the rate of supplementary benefit was true, but unfortunately it is not. There are now more people in deeper poverty in Britain, and the rate of benefit has not kept pace with the cost of living for poor people. As a mother, what would the Prime Minister say to the mother of two who asked in the "Christmas on the Breadline" report:
How can you explain to a child who thinks that mum and dad can work miracles, that he cannot have something because there aren't enough pennies, or that Father Christmas has run out of toys?
The right hon. Lady is usually generous with advice. What is her advice to that woman?

The Prime Minister: The right hon. Gentleman is wrong about supplementary benefit. Supplementary benefit has gone up—[HON. MEMBERS: "Scrooge".]

Mr. Speaker: Order.

The Prime Minister: Supplementary benefit is up by 6 per cent. over and above the rate of inflation and supplementary benefit scale rates for children under five years old have gone up by 29 per cent. over and above the rate of inflation. May I also remind—[Interruption.]

Mr. Speaker: Order.

The Prime Minister: May I also remind the right hon. Gentleman that 10 years ago this Christmas under Labour the old-age pensioners did not have a Christmas bonus?

Mr. Kinnock: The Prime Minister has run away from giving advice to that poor family, but she has misled the House in her references. The facts are that the retail prices

index has risen by 62·9 per cent., the cost of living for pensioners has risen five percentage points—3 per cent. in real terms—more than that, and for poor families, nine percentage points—5 per cent. in real terms—more than that. Will the right hon. Lady apologise not only to the poor but to the House as well?

The Prime Minister: No, Mr. Speaker. Supplementary benefit is up about 6 per cent. in real terms at the July uprating and the rates for children under five and aged 11 to 12 increased by about 29 per cent. in real terms. Whatever the right hon. Gentleman says, we have done infinitely better than his Government in looking after those on supplementary benefit and infinitely better in letting all old-age pensioners have a Christmas bonus.

Airborne Early Warning Aircraft

The Secretary of State for Defence (Mr. George Younger): With permission, Mr. Speaker, I wish to make a statement on airborne early warning aircraft for the Royal Air Force. I apologise in advance for its length.
The House will recall that in March 1977 the then Government announced their decision to proceed with the Nimrod system to replace the Shackleton in the airborne early warning role. Contracts were placed with what is now British Aerospace plc for the necessary work on the Nimrod airframe, and with GEC Avionics Ltd for the development and production of its mission system avionics. At that time, it was envisaged that the aircraft would be available to the RAF in a training role in May 1982 and for operational service in April 1984.
British Aerospace has delivered the airframes in accordance with its contract. But, as the House knows, serious difficulties have arisen in the development of the avionics system for the aircraft, and these have led to very serious time and cost overruns.
On 26 February last, my right hon. Friend the then Minister of State for Defence Procurement informed the House that the Government had decided to consider all of the available options, both from this country and from overseas, for meeting the RAF's needs before taking a final decision on the way forward. He also announced that for Nimrod itself we had negotiated with GEC revised contractual arrangements involving a sharing of financial risk with the company and giving them adequate incentives for completion.
The intention was that, by the end of an interim period of six months, GEC would provide us with a firm price proposal against a technical specification aimed at fulfilling the needs of the RAF, and would also demonstrate to us the progress it had achieved on the development of the project. Meanwhile, we would explore alternative solutions. On 25 September my noble Friend the Minister of State for Defence Procurement announced that best and final offers were being invited from GEC Avionics for the Nimrod and from the Boeing Aerospace Company for the E3A aircraft. Those offers have now been received and assessed.
GEC's offer for Nimrod has been judged against a cardinal point specification based on the air staff requirement endorsed in 1977, with the addition only of an air-to-air refuelling capability. Since 1977 the air threat against the United Kingdom has increased. But we have not, as they say, moved the 1977 goalposts so far as the Nimrod system is concerned.
GEC's offer covers three levels of attainment. In ascending order, and cumulatively, it has offered three aircraft in the second half of 1987 to the standard of the present trials aircraft; six aircraft between mid-1989 and mid-1990 which would approach the final standard subject to certain exclusions, of which the most important is a vital secure data link to and from the aircraft; and 11 to the final standard between October 1991 and September 1993.
The first of those offers is not of any value, as the system is not now of a standard that could be used for training. The question that I have had to consider is whether, taking account of the work GEC has done since February, and in particular of recent flight trials, together with our knowledge of the results it has achieved during

the last nine years, I can have confidence that it could deliver aircraft with the second and third levels of performance in the time scales that it has offered. This is an assessment of the Nimrod programme against the objective standard of the air staff requirement and not against the E3A.
I am sorry to say that the conclusion that I have reached after the most careful consideration is that I cannot have that confidence. GEC has certainly made technical progress in some areas since February, and has also accepted contractual terms which would give it the strongest incentive to achieve success. I pay tribute to it for that.
Nevertheless, there have been technical disappointments as well as progress. The recent flight trials which have been attempted have not produced a consistent and reliable pattern of results. Such results as have been achieved fall well short of the air staff requirement. The company has therefore made proposals for a new programme of work which would improve the system's performance over the next few years. I have considered the proposals very carefully, but the unanimous view of my scientific and military experts is that the required performance is unlikely to be achieved before the mid-1990s at the earliest, if then.
This is a question of scientific and engineering judgment; the likelihood of success does not lend itself to absolute proof one way or the other. I must judge the prospects on the basis of the scientific and service advice available to me. That advice is clear and unanimous.
As I have said, Nimrod AEW should have entered RAF service for training in 1982 and for operations in 1984. Airborne early warning is a vital air defence capability and multiplies the value of other forces. The existing Shackletons, which entered service in this role in 1972, are obsolescent and would be of limited value in hostilities.
Very reluctantly, I have decided that the time has now come to cancel the Nimrod AEW programme, notwithstanding the expenditure of £660 million so far, just over half of which has been spent on the avionics. All existing contracts are therefore being terminated. Subject to satisfactory completion of contractual negotiations, we shall instead be ordering six E3A aircraft from Boeing now, with the option of adding a further two within the next six months. The E3A is already in service with the NATO AEW force as well as with the United States air force. The RAF version will meet or come close to the 1977 operational standard we have set and will, in several respects, significantly exceed it, thus improving the RAF's capability against the military threat. There is plenty of potential for stretching the system to match further developments in the threat. I am confident that the E3A will give excellent service with the RAF.
Allowing for termination costs on the Nimrod contracts, the cost of acquiring the six E3A's with initial support will be £860 million at 1986–87 prices, which is £200 million more than the remaining cost of acquiring 11 Nimrods. Those prices are based on sterling quotations from Boeing. The difference represents value for money given our total confidence in the E3A's ability to perform the operational task in an acceptable time scale. On a through-life cost basis including running costs over 20 years, the difference between the two is marginal. These comparisons are confined to future expenditure and take no account of past expenditure on the Nimrod system. The


cost of this purchase will be contained within the planned defence expenditure totals published in my right hon. Friend the Chancellor's autumn statement.
Nevertheless, this is a sad decision to have to take, but I have no doubt that it is the right one. There are lessons for all of us in this outcome, and I do not seek to evade my Department's share of responsibility. Our experience with Nimrod has reminded us of the importance of establishing agreed contractual terms at the earliest possible stage, with clear specifications and agreed acceptance criteria, which place the contractor under an effective discipline. My fellow Defence Ministers and I will be ensuring that these and other lessons are fully absorbed and acted on in our future handling of major projects.
While this must inevitably be a sad day for GEC and its work force, this decision must be seen in its proper context. GEC will remain one of the MOD's biggest equipment suppliers; we spent over £700 million—[Interruption.]

Mr. Speaker: Order. This is a statement of great importance that the entire House is anxious to hear.

Mr. Younger: GEC will remain one of the MOD's biggest equipment suppliers; we spent over £700 million with it last year, even excluding expenditure on Nimrod. It and other British firms will continue to design and manufacture airborne radars despite the present decision. The loss to British defence technology will be solely in this highly specialised field of large and advanced AEW systems, and it is not strategically vital for this capability to be retained in British industry. In any case, Britain will continue to be involved in this technology through the participation of Racal, Plessey and Ferranti in the E3A order for the RAF.
Furthermore, Boeing's proposals for the E3A include a contractual commitment on its part to an extremely high level of offset, amounting to £130 to be spent on work for British companies for every £100 which we spend on the E3A. This commitment has been welcomed by British firms which will be participating in the E3A project. Boeing is publicly committed to placing high technology work with British companies and has an excellent record for honouring undertakings of this kind. Our assessment is that job losses resulting from the cancellation of Nimrod will be equalled if not exceeded by job gains in firms all over the country resulting from Boeing's offset proposals.
As I have said, the decision that I have announced has not been an easy one. I wish very much that it could have been otherwise. However, if the RAF is to have the equipment it urgently needs to defend this country, this is the only decision that can be right. I commend it to the House.

Mr. Denzil Davies: The Secretary of State's decision is not only sad; it is a bad one. It is a bad decision for Britain's defence interests because ultimately a country can defend itself only on the basis of the strength of its industrial and technological base. The Secretary of State and the Government have dealt a heavy blow to that industrial base in an area of high technology.
The decision will be bad for the economy because jobs will be lost and Britain, yet again, will cease to be a prime contractor producing systems and will become a subcontractor producing components for industries and factories of other countries. It is a bad decision financially

because upwards of £900 million in the end will have been wasted completely. Apparently, another £860 million will have to be found from within the defence budget.
I shall seek to catch your eye later, Mr. Speaker, to apply for an emergency debate under Standing Order No. 20, but I wish briefly to ask the Secretary of State the following questions. Will he tell the House why, on 5 December, he stated publicly that both systems work? Is that still his view? Can he tell us—his statement did not say this—when the first Boeing aircraft will come into operation with the Royal Air Force? Are there any plans for hiring from the Pentagon in the meantime other Boeing aircraft, and was that offer available to GEC as well as to Boeing?
Does the right hon. Gentleman agree that jobs will be lost? What will be the penalties if Boeing fails to meet the contractual obligation of, apparently, £130 for every E100 spent? Does the right hon. Gentleman agree also that the Government have handed Boeing a world wide monopoly in early warning systems and dealt a severe blow to GEC's hopes of teaming up with Lockheed and selling their system in other parts of the world?
Since the Secretary of State has said that both systems work, since some of his officials have behaved disgracefully over the past few weeks, and since the right hon. Gentleman now says that it is merely a matter of technical judgment, will he agree to an independent technical evaluation of the two systems before contacts are signed?

Mr. Younger: I am surprised at the right hon. Gentleman's reaction. Of course this decision wil be a great disappointment to GEC and to all those who work for it; I recognise that. To say that this decision has an effect across the whole of the British defence industry is to fly in the face of all the facts and the present outstanding export record of the British defence industry. I said, and I stand by it, that both systems work. I did not spend three hours flying over the North sea fiddling with a system in Nimrod that did not work. The question is how well it works against the stark demand of air staff requirement 400. The answer was given in my statement, which is that, at present, it is agreed by all that it does not work anywhere near that standard. I have had to judge whether the company will successfully make the system work within three years. Regretfully, I decided that that is not credible.
The first aircraft will be delivered by Boeing in 1991. No offer has been made to lease aircraft in the meantime. If an offer is made, of course I shall consider it.
Penalties for non-performance will be in the contract signed with Boeing. Boeing has a good offset record in this country. Indeed, when we purchased Chinook helicopters a considerable time ago, Boeing exceeded the undertakings it had given to provide offsets.
I repudiate absolutely what the right hon. Gentleman said about my officials. My officials have been involved throughout this project. Their whole interest in this matter has been to see a successful conclusion to the planning of the Nimrod aircraft with which they were involved in the early days. None of them would be so foolish as to put into service with the RAF a product that will not do the job that it is required to do.

Sir Ian Gilmour: Since, as my right hon. Friend knows technical assessments are


seldom just that, but very often much tendentious argument disguised in technical uniform, what steps did the Government take to check the apparently nebulous assessments that were made before this damaging decision was taken?

Mr. Younger: I appreciate my right hon. Friend's point. One of the great difficulties in making assessments is that they are matters of judgment. I disagree with my right hon. Friend that we in any way took a nebulous set of calculations. We have been checking the performance of the Nimrod and, indeed, the other aircraft, the E3A, against the specified requirements of ASR400. It is against that particular requirement that we carefully assessed the performance of the aircraft, and in that respect it was found wanting.

Mr. James Wallace: It is no secret that members of the alliance would much rather that the Secretary of State had been able to award the contract to GEC. We have made no bones about it. Defence considerations were paramount. The right hon. Gentleman has given some information about the comparative performance of the two systems. Is he in a position to give the House more information on this matter! There is obvious concern about the jobs that are put at risk and about the offset. What guarantees has the Secretary of State had from Boeing that these offset jobs will be of high tech quality? Is he able to state that the United States will not be able to make a spurious claim of extra-territoriality with regard to the contract terms?
The Secretary of State has said that his Department must accept its share of the responsibility. What is that share of the responsibility? The taxpayer will demand a full explanation of why more than £600 million has gone down the drain on this project.

Mr. Younger: The hon. Gentleman is right in saying that defence requirements are extremely important, although they are not the only considerations, as he will recognise. I stress that, in making this decision, I have not compared the Nimrod with the E3A. I have compared each of them against air staff requirements 400, which is a very different thing. There are, of course, respects in which the E3A exceeds the requirement by quite a long way, because it is an older system. I have not taken that into account in making this decision.
Of course, there are no guarantees about the offset, except for Boeing's very good record in offsets. I suggest that the hon. Gentleman asks some of the firms concerned about the quality of the offsets. He will then find that they are extremely pleased with the quality of the jobs that they will be offered in this work and consider that it will bring them into major international work on a high technology project which will be to the advantage.
As for technology transfers, in spite of the article in one of the newspapers this morning, it is not correct to say that my right hon. and learned Friend the Attorney-General has ruled that United States requirements must not be accepted by British companies. Where company-to-company transfers are concerned, it is a matter of commercial judgment for the United Kingdom company to decide whether to accept United States terms. However, it is not generally the Government's policy for Government officials to give similar undertakings to the United States Government.

Mr. Michael Heseltine: Will my right hon. Friend accept that, because this is a sad decision for a major British company and our economy's industrial base, it is a particularly courageous decision by my right hon. Friend? Will he stress to the House that, if he has secured the unanimous support of the Army and the Navy, the budgets of which will be adversely affected by this decision, it is a far more effective check on the rectitude of the decision than any attempt to double guess it by the House?

Mr. Younger: I am grateful to my right hon. Friend for his comments. He will appreciate more than most people how difficult it is to take these decisions and the many considerations that must be taken into account. I agree with him entirely that the support and the unanimous advice of the service people and scientists involved are difficult to overturn. I assure my right hon. Friend that those in the services who are concerned with this matter acted entirely objectively and disinterestedly in the way in which they gave that advice, having solely in their minds the best interests of the RAF's procurement policy.

Mr. A. E. P. Duffy: Is the Secretary of State aware that for a prime domestic bid for a major weapons system—with all the jobs, exports and high tech involved—to be overlooked in favour of a foreign supplier at this late stage is without precedent in the history of defence procurement? Can the right hon. Gentleman imagine either the French or the United States putting themselves in this subservient role? Is he aware that this is a black day not only for British industry and for GEC Avionics—because the Government have let us down—but for his Department? Why try the House with the right hon. Gentleman's description of the checks that his Department is now to introduce? Why did he not introduce them sooner and achieve a better cost-effective relationship with GEC Avionics?

Mr. Younger: I agree with the hon. Gentleman that one's first reaction is one of extreme disappointment that the British bid was not successful. I think that hon. Members on both sides of the House would have very much hoped that it could be successful. But the hon. Gentleman's memory is extremely selective. It is not in any way unprecedented, unfortunately, for a Government to cancel a large project from a domestic supplier.

Mr. Duffy: Which one?

Mr. Younger: The hon. Gentleman may remember the cancellation of the TSR2, which was also a project which had an aircraft already flying. According to Hansard of 13 April 1965, the Government cancelled it because they felt that further expenditure on the aircraft was not justified militarily. We, too, have conducted an honest review, as I believe did the then Government, to make up our mind on a difficult technological matter. I hope, therefore, that the hon. Gentleman will not say that this decision is unprecedented.

Mr. James Couchman: Will my right hon. Friend join me in congratulating the airborne display division of GEC Avionics on its recent success in gaining a $70 million export order for the world's first holographic head-up display unit to be supplied to the USAF? Will he acknowledge that today's sad decision, which I am sure has been taken with the greatest reluctance by Cabinet and which I am sure the House will have to endorse in view of


the evidence, will be a severe blow to Marconi's prestige in high technology and may prejudice future export orders? Will he therefore take urgent steps to re-establish the Government's confidence in one of our leading avionics firms by considering giving the RAF the same piece of equipment in which the USAF places such confidence?

Mr. Younger: I appreciate my hon. Friend's comments. However, while this project and all that accompanies it has had an unhappy history and those involved in it must feel sad about today's decision, that does not mean that GEC as a whole is not a high quality company producing good technology.
My hon. Friend particularly referred to the selling of the head-up displays to the United States armed services. I understand that some £127 million worth of equipment has been sold by GEC for installation in four aircraft types—the F16, the A7 Corsair, the A4 Skyhawk, and the Viggen. That is a great tribute to the company and something that I hope will be noted.

Mr. Robert C. Brown: Is the Secretary of State aware that of the many dismal statements made from the Dispatch Box in the past few years, this is the worst of all? Does he realise that in 1977 the present Lord Mulley announced the letting of contracts for an AEW system that the RAF was intended to have in service within five years? After four more years, the Secretary of State has today made this deplorable statement. The right hon. Member for Henley (Mr. Heseltine) is laughing. He should hang his head in shame because he, along with the present Secretary of State, fiddled for four years allowing the RAF, at a time of much greater threat to this country, to go without the AEW system that we thought in 1977 was essential for 1982.
The Secretary of State is selling the pass of British industry by selling out to a foreign supplier. Bearing in mind that the Boeing does not meet the full criteria of the RAF, why not give GEC and the British electronics industry a few more months to get their act right?

Mr. Younger: I should have thought that the hon. Gentleman, who is an ex-Defence Minister, would have been the first to recognise that the requirements of the RAF in the vital matter of air defence must have high priority. The hon. Gentleman should have thought back a little further and recalled the form of the contract that he and his right hon. Friend placed. As I have made clear, I do not consider that we are devoid of blame in this matter, but the hon. Gentleman might have been wiser to admit that he and his right hon. and hon. Friends are probably not devoid of blame either. This is not a happy position.
With respect to the conclusion of this matter, I very much doubt whether the hon. Gentleman would have supported us if we had cancelled the project five years ago any more than he has supported us today. We would be taking the wrong decision if we allowed the RAF to receive equipment that did not work properly.

Sir Peter Blaker: What would the Russians have thought of our determination to defend ourselves if we had chosen second best?

Mr. Younger: My right hon. Friend has made a valid point. The Russians would be extremely surprised if, in view of the threats that we face, we did not pick the piece of equipment that could be reliably expected to do the job.

Mr. John Cartwright: Is the Secretary of State aware of the widespread support for the view that Britain must have the most effective AEW system? If the technical assessments are as clear cut as he suggests, why was the decision delayed so long? Since he accepts that the decision rests on a judgment of technical and engineering factors, will he consider publishing a declassified assessment of those factors so that we can see that justice has been done?

Mr. Younger: I appreciate the tone and common sense of the hon. Gentleman's remarks. On earlier cancellation, I hope that all hon. Members will bear in mind that it is extremely easy to be wise after the event. I cannot think of any applause which would have been forthcoming if the project had been cancelled when the firm concerned could have reliably said that it had not been given a chance to demonstrate how the equipment would work in an aeroplane in real conditions. We have given the firm that chance. That was only fair to those embarked on the project.

Several Hon. Members: rose—

Mr. Speaker: Order. I must take account of the fact that the rest of today's business is under a timetable motion which was passed by the House last Friday. I shall allow three more questions from either side.

Sir Geoffrey Johnson Smith: I recognise the practical common sense and courage demonstrated by my right hon. Friend, but will he take an early opportunity to inform the House of the technological opportunities available to the British firms participating in the Boeing E3A project?

Mr. Younger: I shall certainly gladly take an early opportunity to spell out those details further. I am absolutely confident that Boeing is genuine in its determination to provide in full the offset undertakings which it has given. As I have said, its past record gives every confidence that it will again do that.

Mr. Lewis Carter-Jones: Will the Secretary of State take it from me that when I flew Nimrod a fortnight ago the question of clutter was resolved and met air staff requirements? Will he tell the House whether on his flight the interceptions also met the requirements? Will he clarify those two points?

Mr. Younger: We have been testing the equipment against all the requirements of ASR400, one of which is to eliminate the clutter and another is the ability to take up and track targets. In both cases the system at present falls short of ASR400. That is not disputed between the Government and the company. On occasions the equipment meets some of the criteria. The hon. Gentleman is a well-known expert in aviation matters and he will appreciate that if one is in an AEW aircraft at a time of war and liable to be shot down by an enemy, one requires the equipment to work all the time not just occasionally.

Mr. Kenneth Warren: Does my right hon. Friend accept that over the past nine years there has been appalling mismanagement in the procurement executive of the Ministry of Defence on this project? Therefore, will he assure the House that there will be an inquiry into that and that those responsible, whether officers or officials, will be disciplined or discharged?

Mr. Younger: I certainly agree with my hon. Friend that all concerned would be well advised to try to learn as many lessons as possible from this sorry affair. I agree that we must look into our procedures, both for contracting and the way in which we deal with large contracts, to ensure that such cost and time overruns do not happen in future. In that way at least some good can come out of this business.

Mr. Frank Field: Will the compensation formula include or exclude orders already won by British industry? Will the Secretary of State give the House a yes or no answer?

Mr. Younger: I appreciate the hon. Gentleman's point. Boeing will give orders in addition to existing contracts. They will certainly be additional to existing contracts, so I hope that they will be 130 per cent. of the value of the E3A order.

Sir Hector Monro: With the sad failure of GEC Avionics, is it not good news for the Royal Air Force which will now receive the aircraft and equipment that it wants and feels is absolutely essential for the air defence of the United Kingdom?

Mr. Younger: I agree with my hon. Friend. With his long experience of aviation matters, he will know that the RAF, on the one hand, will want the best equipment and, on the other hand, will feel sad that it was not possible in this case even for it to recommend the British alternative. It has good equipment which will enable it to do its job effectively.

Mr. David Young: Is not the real tragedy of the decision that British forces will be technically dependent on the United States not only now, but for the foreseeable future? Will the Secretary of State assure us that the RAF assessment was not settling old scores of those who never wanted the Nimrod defence system in the first place?

Mr. Younger: I absolutely reject the hon. Gentleman's assertion that the future of the RAF will depend on the United States. These aircraft will be purchased by the Ministry of Defence and become our property, and we shall operate them in the normal way. If his theory were turned on its head, it would mean that the United States was dependent on us because it buys Harriers. That would not be realistic. I absolutely reject the suggestion of the RAF settling old scores. Many people in the RAF will regret that we could not have the British alternative, but at least they are sure that they have good equipment.

Several Hon. Members: rose—

Mr. Speaker: Order. I shall bear in mind those hon. Members whom I have not been able to call when the matter is discussed in future.

Business of the House

The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): With permission, Mr. Speaker, I should like to make a statement about the business for the first week after the Christmas Adjournment, which will be as follows:
MONDAY 12 JANUARY—Second Reading of the Local Government Finance Bill.
TUESDAY 13 JANUARY—There will be a debate on the Army on a motion for the Adjournment of the House.
WEDNESDAY 14 JANUARY—Opposition Day (4th Allotted Day). There will be a debate on a motion in the name of the Leader of the Opposition, the subject for debate to be announced.
Motion on the Industrial Training Levy (Construction Board) Order 1987.
THURSDAY 15 JANUARY—Remaining stages of the Coal Industry Bill.
Motions on the Double Taxation Relief (Taxes on Income) (Mauritius) Order and the Double Taxation Relief (Taxes on Income) (France) Order.
The Chairman of Ways and Means has named opposed private business for consideration at seven o'clock.
FRIDAY 16 JANUARY—Private Members' Bills.

Mr. Neil Kinnock: I am grateful to the Leader of the House for his statement.
On 12 January the Secretary of State for the Environment will introduce legislation. To prevent a further lapse by this recidivist Secretary of State, can the Leader of the House give an assurance that his right hon. Friend will consult with Greenwich council whose impending legal challenge brought the Government's lawlessness of the past six years to light?
In the debate on the Army, can the Leader of the House ensure that the Secretary of State for Defence comes to the House with an adequate response to the problems encountered by tank workers at the former ROF factory in Leeds which is now owned by Vickers? It has laid off between 400 and 500 tank workers as a consequence of the MOD changing its system of ordering?
Is the right hon. Gentleman aware of the recent Shelter report that more than 500,000 pensioners live in accommodation which is officially unfit for habitation and that more than 100,000 households are likely to have been declared officially homeless by the end of the year? In recognition of the urgent need to combat that increase in misery, will the right hon. Gentleman agree to provide time for a debate on homelessness shortly after we return in the new year?
There is great concern on both sides of the House about the appalling decline in the merchant shipping fleet. That was recently highlighted by the right hon. Member for Taunton, (Sir E. du Cann), among others. Since that continuing decline has serious trade and defence implications, will the Leader of the House give Government time for a debate as soon as possible?
I understand that later today the Government are likely to announce as part of the campaign against the spread of AIDS that clean needles will be made available to registered drug addicts. While I accept the need for that measure, may we expect in common justice that similar


provision will be made for free disposable syringes for the 200,000 or so diabetics in Britain who at present must pay the full price for them?
Will the Leader of the House confirm that the Department of Trade and Industry has commenced an investigation into alleged insider trading activities in the Department of Trade and Industry, the Monopolies and Mergers Commission or the Office of Fair Trading? Will he undertake investigations into that and ensure that a full statement is made to the House today so that we may be fully acquainted with the facts as they are hitherto known?
Finally, may I wish the Leader of the House a happy Christmas. I ask him to confirm, as he said to the Select Committee on Procedure on Tuesday, that we are—I use his words—"in the last few months of this Parliament". May I ask the Leader of the House in his usual candid fashion, to be a little more specific about dates since he obviously knows something that not even the Prime Minister knows?

Mr. Biffen: If I may, I will take those almost limitless number of points that the right hon. Gentleman has just raised in reverse order and start with perhaps the most attractive of all concerning the timing of the general election. I have nothing to add to the right hon. Gentleman's general education on this matter, except to assure him that it is an election to which I look forward with much greater relish than he does.
I now refer to the point about alleged insider activities within the Department of trade and Industry in the context of takeover bids. This matter was raised last week, and I do not think I have anything further to add to what I said then, but, of course, I will refer his comments to my right hon. Friend the Secretary of State for Trade and Industry.
The right hon. Gentleman was correct in assuming that there will be a statement concerning the provision of clean needles in various restricted circumstances as part of the campaign against AIDS. I take note of what he said about diabetics and, of course, I will refer that argument to my right hon. Friend the Secretary of State for Social Services. The right hon. Gentleman will appreciate that the statement is strictly and clearly in respect of AIDS.
With regard to the merchant fleet, I have no plans for an immediate debate upon it, though doubtless it could arise, at least with the permission of the Chair, as part of the debate that we have on the Royal Navy. I will, of course, refer the right hon. Gentleman's comments to the usual channels. I will also refer his request for a debate on the homeless.
I am sure that my right hon. Friend the Secretary of State for Defence will be fully apprised of the importance of the royal ordnance factories and that they will feature in the debate that takes place in the first week after the recess.
I am sure that my right hon. Friend the Secretary of State for the Environment, who always carries his burdens with good nature and with a concern for cutting through the difficulties, will be only too well aware of the point about the Greenwich council. But, just by some chance that it is in a Christmas spirit that the right hon. Gentleman has raised this point, fearing that there might have been an oversight, I shall see that it is corrected.

Mr. Eric Forth: My right hon. Friend the Leader of the House has said that there will be an Opposition day on Wednesday January 14. If he finds

that the Opposition have been unable to come up with an appropriate subject, will he suggest that the texts of early-day motions Nos. 1 to 38 entitled "Conduct of the Leader of the Opposition" may well give the House an opportunity, long overdue, to debate the important matter of the role of the Leader of the Opposition and his relationship with the gentleman in Australia, Mr. Turnbull, and quite what the Leader of the Opposition thought he was up to; what has been his relationship with Mr. Turnbull, and what instructions he has taken from Mr. Turnbull? Will my right hon. Friend consider suggesting that, if the Opposition do not take this up, he will provide official time to debate the texts of early-day motion Nos. 1 to 38?

Mr. Biffen: My hon. Friend has said that he is anxious about the recent brisk level of controversy and that it should be continued into the new year. Certainly, the course he recommends would sustain it, but I do not think I can answer for what will be the topic chosen by the Leader of the Opposition. We shall all watch with interest.

Mr. James Wallace: Will the Leader of the House take note of the considerable concern and surprise on this Bench that there has been no ministerial statement yet on the Nuclear Installations Inspectorate report on Sellafield? It was a critical report which caused considerable alarm. Can the Leader of the House say whether an Environment Minister will be coming to the Dispatch Box before or immediately after the recess to make a statement on that report?
I thank the Leader of the House for the informal indications that he has given that he will not be proceeding, until January, with the motion under his name on short speeches. Will he take account of the fact that some of the concern relates to the timing of the period or short speeches? Before the right hon. Gentleman proceeds with the motion, will he give an indication that the usual channels will discuss the interests of minority parties in this matter?

Mr. Biffen: Perhaps I should have extended it to short questions, but I take note of what the hon. Gentleman says. With regard to his first point, which I think is of greater substance, I am sure that the hon. Gentleman will appreciate that my right hon. Friend the Secretary of State for the Environment is not yet in possession of the full report. Therefore, there can be no question of any statement being made this side of the recess.

Mr. Michael Latham: Is my right hon. Friend aware that hon. Members with agricultural constituencies will be looking to him to provide shortly a day for a debate on agriculture following the important statement made yesterday by my right hon. Friend the Minister of State, Ministry of Agriculture, Fisheries and Food? Will he ensure that agriculture gets urgent priority in the new year?

Mr. Biffen: I will bear in mind my hon. Friend's request. I realise that agricultural interests are widely represented in this House, particular on the Conservative Benches. I appreciate that there is a general anxiety to have an occasion on which formally to praise my right hon. Friend for his recent achievements.

Mr. Gordon Wilson: Is the Leader of the House aware that unemployment in Scotland is steadily going up whereas in the rest of the United Kingdom, it is


going down? In my constituency, we are to lose another 500 jobs after an announcement yesterday. Will the right hon. Gentleman take an early opportunity to initiate a debate on the problems facing the Scottish economy because it seems to be facing problems that no longer affect other parts of the United Kingdom?

Mr. Biffen: I bear in mind that the hon. Gentleman makes a point about unemployment in the Scottish context that he believes makes it separate from the more general considerations of unemployment. Therefore, I take heart from that and think that it might be suitable for debate in the Scottish Grand Committee.

Several Hon. Members: rose—

Mr. Speaker: May I remind the House that business is subject to a timetable motion today. I will allow questions to go on until 4.25 and then we must move on.

Mr. Patrick Cormack: Does my right hon. Friend accept that it would be quite wrong for any announcement about free needles for drug addicts not to be coupled with an announcement of free needles for diabetics?

Mr. Biffen: I will pass on my hon. Friend's observation to my right hon. Friend the Secretary of State for Social Services.

Mr. Andrew Faulds: When will the right hon. Gentleman provide the House with the opportunity to debate a number of very important issues in the heritage, specifically the gutting of the interior of the Royal Mint which the Tower of London wanted for its own purposes and the refusal of the Government to sponsor the purchase of the Royal Dental hospital to provide the National Portrait gallery with more exhibition space for its collections?

Mr. Biffen: I thank the hon. Gentleman for drawing attention to those two points. I will of course refer them to my hon. Friend the Minister for the Arts.

Mr. Robert Atkins: Has my right hon. Friend seen page 2 of The Times on which reference is made to a Liberal and SDP attempt to draw attention to many of the seats of my right hon. and hon. Friends in terms of the voting record and their behaviour therein? Will my right hon. Friend comment on the fact that in one constituency, that of my right hon. Friend the Member for Chelmsford (Mr. St. John-Stevas), recent opinion polls showed a 9 per cent. reduction in the potential Liberal vote and an increase of 5,000 in the possible Tory majority? Perhaps the combined voting records of my hon. Friends in this matter would be more than 10 times the voting record of many Members of the alliance.

Mr. Biffen: I am sure that when it comes to any comparisons of voting performance, quality of speeches, conciseness of questions and general political awareness, the alliance would be at a major detriment. The more good customer guides we can have on what is on offer politically, the better it will be for us.

Mr. Dave Nellist: Has the Leader of the House seen early-day motion No. 85?
[That this House condemns the Government's intention to privatise Rolls-Royce and would utterly refute the Under

Secretary of State for Defence Procurement's recent statement that Rolls-Royce employees 'relish the idea of privatisation'; fully agrees, on the contrary, with the concern of most employees that their jobs, wages and working conditions would be at risk; reminds the Government that it was a previous Conservative administration which originally brought the company into state ownership, in order to prevent it from going out of business; commends the dedication and skills of the workforce, which has been responsible for revitalising the company since 1971; contends that private ownership is totally unsuitable for an industry which requires large amounts of advance investment for product research and development; re-affirms its belief that the future for Rolls-Royce and the workforce is best guaranteed by it remaining fully in the public sector and not subject to short-term yearly profit analyses; and looks forward to a Labour Government that is prepared to safeguard jobs by investing in manufacturing industry.]
It concerns Rolls-Royce and is supported by 115 Labour Members. It is against the threatened privatisation of that company. When will the Leader of the House arrange for a debate on the Government giving away that company after cancelling £370 million of the company's debts? Apart from giving those 115 Labour MPs the chance of a major debate to oppose the privatisation of companies like Rolls-Royce, we may like to draw the comparison between the fact that the Tories can cancel debts prior to privatisation for companies like Rolls-Royce but cannot do it for city councils.

Mr. Biffen: As the hon. Gentleman uses the pretext of a question to make a speech, I begin to wonder whether there is any legitimacy in having a debate. He raises an important point about any proposals on privatisation for Rolls-Royce and I shall consider carefully what he said about a debate, but I could not accept one in the terms in which he recommended it.

Mr. Harry Greenway: May I associate myslef with my hon. Friend the Member for Staffordshire, South (Mr. Cormack) who called for free needles for diabetics? May we have an early debate on the terrifying treatment that my constituent Mrs. Maureen McGoldrick has received at the hands of the evil Brent council?

Mr. Biffen: My hon. Friend's point about Mrs. McGoldrick might be suitable for an Adjournment debate, not least because she is a distinguished constituent of my hon. Friend. I cannot say more than I already have in regard to my hon. Friend's first point.

Mr. Tony Lloyd: The Leader of the House will be aware that there has been a redetermination of the funding of local passenger transport authorities. Will he draw the Secretary of State for Transport's attention to the anxiety that the Bill that we are to consider when we reassemble after Christmas will mean that the redetermination no longer takes account of local factors but is a common uplifting, which would be unacceptable to passenger transport authorities?

Mr. Biffen: I shall pass that comment on to my right hon. Friend the Secretary of State for Transport. I am sure that the hon. Gentleman will have perceived that he will be able to make his arguments when the legislation is before the House.

Mr. Roger Sims: As Chairman of the Services Committee, my right hon. Friend will know that


that Committee has decided, although hon. Members have not been formally notified, that a restriction should be put on the number of bookings that hon. Members can make for sponsoring functions in the banqueting room. I appreciate that the reason for that is that a few hon. Members have abused their privilege of being able to sponsor lunches and dinners. Does my right hon. Friend appreciate that a number of his colleagues are finding considerable difficulty in arranging routine parliamentary constituency functions? Will he review the arrangement as a matter of urgency?

Mr. Biffen: I am grateful to my hon. Friend for informing me that he would raise this matter. I shall most certainly look into it. I realise that it is of general concern to the House, and I shall be in touch with my hon. Friend.

Mr. Laurie Pavitt: Will the Leader of the House ask the Minister for Health if he will make a statement early in the new year about the increasing problems which face people who are dying from cancer? A person who has an inoperable cancer goes home to die, and it may take three or four months before that happens. During that time, that person may need five or six medications every three weeks at a cost of £12 or £14·50. Surely it would be possible for the Government to arrange, in what I submit is a special case, for charges to be remitted as we know that the people concerned have only a short time to live.

Mr. Biffen: I take account of what the hon. Gentleman says, and of course I shall refer it to my hon. Friend as he requests. Meanwhile, he may wish to try to alert the Department through the offices of Question Time as the Department will be first for questions on Tuesday 13 January.

Mr. Nicholas Winterton: In view of the Government's deeply regrettable decision in respect of the airborne early warning system purchased by the Ministry of Defence, will my right hon. Friend arrange for a debate as soon as possible on the future of manufacturing industry in this country, bearing in mind the fact that manufacturing industry is our only source of genuine wealth creation?

Mr. Biffen: I cannot in any sense accept the strictures that my hon. Friend puts on the Government, my right hon. Friend the Secretary of State for Defence or the announcement that he made earlier this afternoon. I take account of the importance that my hon. Friend attaches to manufacturing industry. I hope that he extends the same feelings to agriculture, services and all of the other wealth-creating elements in the country. They will always be uppermost in the mind of the Government and, I believe, the House when we debate the economy.

Mr. Ron Lewis: Now that the transport users consultative committee has recommended that the Settle to Carlisle railway line must be kept open, will the right hon. Gentleman arrange for the Secretary of State for Transport to make a statement early in the new year about the Government's intention to abide by that committee's decision?

Mr. Biffen: I shall of course refer that request to my right hon. Friend the Secretary of State for Transport. I am sure that the hon. Gentleman will be here for questions on Monday 12 January when Transport comes top. He may then have a chance to put his question in his own way.

Airborne Early Warning System

Mr. Denzil Davies: I beg to ask leave to move the Adjournment of the House under Standing Order No. 20 for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the need for an independent and urgent inquiry into the purchase of a new airborne early warning system for the Royal Air Force.
The matter is self-evidently specific. It is important because vital issues of national defence, British industry and public finance arc involved. It is certainly urgent because since the Government have taken a decision in principle, there must be a debate before contracts are signed with Boeing.

Mr. Speaker: The right hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
the need for an independent and urgent inquiry into the purchase of a new airborne early warning system for the Royal Air Force".
I am satisfied that the matter raised by the right hon. Member is a proper one to be discussed under Standing Order No. 20. Does the right hon. Gentleman have the leave of the House?

The leave of the House having been given, the motion stood over, under Standing Order No. 20, until Seven o'clock this evening.

Telephone Facilities

Mr. Tam Dalyell: On a point of order, Mr. Speaker. You very courteously wrote a letter to my hon. Friend the Member for Warley, East (Mr. Faulds) and me concerning telephone tapping. In the light of new information that I have submitted to your office about a tapping unit—LCS 9 AES—which is outlined on the front page of Labour Weekly, could you possibly give a ruling, when we come back, on a matter which affects hon. Members on both sides of the House?

Mr. Andrew Faulds: Further to that point of order, Mr. Speaker. I should be grateful if you could let the House know, Sir, when you think you may be able to let the House have news as to your response to my request that the installation of equipment which provides the facility for eavesdropping on Members' telephone calls should be referred to the Privileges Committee, and whether you would agree to that.

Mr. Speaker: The hon. Gentleman knows the form on this. I have written to him about it. I hope that he has had my letter.

Mr. Faulds: Not yet.

Mr. Speaker: I think that he should read it first.

BILLS PRESENTED

LOCAL GOVERNMENT FINANCE

Mr. Secretary Ridley, supported by Mr. Secretary Hurd, Mr. Secretary Edwards, Mr. Secretary Baker, Mr. John MacGregor, Mr. Secretary Rifkind, Mr. Secretary Moore and Dr. Rhodes Boyson, presented a Bill to validate things done by the Secretary of State in connection with, and to make further provision as to, rate support grants and the limitation or reduction of rates and precepts of local authorities; and for connected purposes: And the same was read the First Time; and ordered to be read a Second time tomorrow and to be printed. [Bill 41.]

GYPSIES (CONTROL OF UNAUTHORISED ENCAMPMENTS)

Mr. Christopher Murphy presented a Bill to amend section 10(1) of the Caravan Sites Act 1968: And the same was read the First Time; and ordered to be read a Second time on Friday 6 February and to be printed. [Bill 42.]

Supplementary Benefit (Single Payments)

Mr. Michael Meacher: I beg to move,
That an humble Address be presented to Her Majesty, praying that the Supplementary Benefit (Single Payments) Amendment Regulations 1986 (S.I., 1986, No. 1961), dated 17th November 1986, a copy of which was laid before this House on 20th November, be annulled.
The issue in regard to these regulations is simple. It is that no civilised society with caring values should allow thousands of its elderly people to die of hypothermia or cold-related conditions brought on by extreme cold during the winter. That is what happened last year and it must not be allowed to happen again this year.
Last year, it is said, 1,060 persons died of hypothermia. That is almost certainly an underestimate because some doctors are known to be reluctant to use the term on death certificates. Of course the Minister can intervene if he wishes. I am quoting his figures but they are the figures for the whole year. I accept that they are not just the figures for the winter, although that figure is high enough at 630. I must make it clear that the real killer is not hypothermia as such but the winter cold which increases the number of deaths among the elderly from heart attacks, strokes and bronchial pneumonia by tens of thousands. In one week earlier this year, in March, during a particularly bitter spell, the death toll shot up to no fewer than 16,000.
It is our contention that the level of benefits proposed by the Government and the quality of housing among elderly people is such that the same catalogue of preventable deaths is likely to recur this winter, yet there is no question that the toll of preventable mortality could be greatly reduced. Other countries have managed it, including those with much colder winters than ours. In France and in Sweden, where it is much colder in winter than Britain, the increase in deaths in February was 6 per cent. In the United States it was 8 per cent. In Scotland it was 19 per cent., and in England and Wales it was 24 per cent. If other countries can safeguard the lives of their frail citizens, why cannot we? The truth is that we can. The two main reasons for lethal chill among elderly people are clearly known to be low incomes and poor housing.
Only about 40 per cent. of pensioners live in centrally heated homes and about 2·5 million live on or even below the official poverty line.
It is now widely understood in geriatric medicine that the danger of pneumonia in the elderly increases at temperatures below 61 deg F. At temperatures below 54 deg F the blood thickens and its pressure rises, increasing the risk of strokes and heart attacks. What makes this so alarming is that we also know from the latest national survey conducted on the subject that more than half of pensioners—54 per cent.—have living room temperatures of below 61 deg F, the point at which the risk of fatal breakdown begins to rise significantly.
Clearly the present level of benefits designed to help pensioners with heating bills massively fails to keep all pensioners warm. The Government implicitly recognised that, and that is why they felt obliged to introduce severe weather payments as an extra in the first place. Our central objection to the regulations is that the Government's objective is completely invalidated by the pathetically trivial nature of the payments.
I asked the Minister about total expenditure but he would not give me an exact figure, so he can correct me


if I am wrong. Total expenditure is likely to amount to only about £2 million to £3 million which, spread over 10 million pensioners throughout an entire winter, is almost an insult.
Our main protest is that the Government, having acknowledged as they do that top-up payments were necessary, then rigged the system to ensure that virtually no one would get them. The minus 1·5 deg C threshold for triggering these payments has not been picked by the Government by chance. The Government deliberately and carefully calculated it as the level which, on past experience, would ensure that only about one in eight pensioners would get a single payment of £5 once every five years. That is so minuscule as to be almost offensive.
Most pensioners will not be entitled to the payment at all. Let us consider the 64 weather areas. I admit that the fact that there are now 64, and not the 16 that I think that there were before, is an improvement. If we take those 64 weather areas into which the Government now divide the country for the purposes of this payment, and use the Government's table, we can see that in two of the winters since the Government came to office not one pensioner anywhere in the country would have got a penny. In two of the remaining winters only pensioners in one of the 64 areas would have got anything, and last winter, which witnessed arctic conditions and was certainly the coldest in living memory, or at least for 40 years, pensioners in more than half of the country would still have been excluded from getting anything. To pretend that such a massively restricted system is an adequate compensation against the bitter winter cold is an insult to pensioners and a reneging of the Government from their social responsibility to the frailest and most vulnerable of our citizens.

Mr. D. N. Campbell-Savours: Is my hon. Friend aware that my constituency is on the north-west coast and that a strong cold breeze comes in from the Solway?
In many homes in my constituency elderly people simply cannot keep warm. Is he aware that many agencies in Cumbria now express anxiety over what will happen this Christmas? They cannot understand why the Government have to be so hard-faced about these matters, in refusing to spend the few additional million pounds that would ensure that those homes are kept warm. What can we do when Governments simply do not want to understand?

Mr. Meacher: The electorate will have an opportunity soon to do something decisive about it. The Government's record on the welfare state, and especially their incredibly shabby treatment of elderly people, will be an issue at the next election. I shall towards the end of my speech make some comparisons along the lines suggested by my hon. Friend but I will repeat the point that was made by the hon. Member for Newark (Mr. Alexander), who is about to leave the Chamber. He made the good point that on this very day the Government are contemplating spending many tens, if not hundreds, of millions of pounds on an airborne early warning system when they are not prepared to spend more than £2 million to £3 million, which is a fleabite, to keep elderly people warm.
I accept the Minister's point that the main thrust of Government assistance for heating bills lies primarily with heating additions and with one-off payments for draught-proofing. There are two powerul objections to his case.

First, under the Fowler Social Security Act, all these extras are set to go in 1988. Certainly the money will be put back into the pool for what the Government call "client group premiums" which includes the elderly but it will mean that help will be targeted less on those with the highest heating costs and needs.
Secondly, the Government claim that the heating additions, which have improved since 1979, are now worth £140 million more in real terms than when the Conservative party came to office. I say unequivocally that that is welcome, but the Government do not go on to say that for every extra pound that pensioners have gained under the Government from higher heating additions, they have lost 30 times as much from the break of the link with earnings at each uprating. If the formula that the Labour Government used had been continued, single pensioners today would receive £8 a week more in pension and married couples would receive nearly £13 a week more.
It is welcome that pensioners are getting £140 million more in heating additions this year, but it is surely thoroughly deplorable that pensioners are getting £4,250 million less this year as a result of the Tory cut in the pension formula. That is the amount by which pensioners have been cheated by this Government, and it is growing every year. If pensioners now received what they were entitled to receive under a Labour Government, the House would not have to bother tonight with this pathetic little measure, which is footling by comparison, and there can be no doubt that many fewer pensioners would die this winter.

Mr. Pat Nicholls: The hon. Gentleman speaks about the Government cheating pensioners, but I am not sure which Government he has in mind. The Government who cheated the pensioners by reneging on that particular agreement were the one in which he served as an Under-Secretary of State for Health and Social Security. That Government proposed that there should be an earnings rather than a prices link, and avoided their own legislation. When the then Labour Secretary of State for Social Services was attacked by pensioners for ratting on his own legislation, he said, with a fair degree of cynicism as I recall, that he had only to take those matters into account and did not have to get them right. Should not the hon. Gentleman be directing his strictures towards that Labour Government?

Mr. Meacher: I hope that the hon. Gentleman will bear in mind, as pensioners no doubt will, that in that five-year period of office, the pension increased by 20 per cent. in real terms, which is an increase of one fifth over and above prices. In the seven years that the Conservative party has been in government, the pension has increased by, I believe, between 3 and 4 per cent. The difference in the level of pension is enormous.
Everything depends on the Government's priorities. This Government are increasing public expenditure this year by £4·5 billion, but all that they can find for pensioners who are facing another bitter winter is the fleabite of £2 million to £3 million in severe weather payments. The previous Labour Government made their priorities clear when they increased the real value of pensions by one fifth. Moreover, we now propose, as a priority for the next Labour Government, a £5 a week increase in the pension for single pensioners and an £8 a week increase for married couples. That is on top of


normal upratings in line with earnings to ensure that pensioners keep pace with living standards. That will be paid for by withdrawing the tax concessions that have been handed out to the richest 5 per cent. in our society since 1979.
In addition, we propose a £5 a week winter premium, payable automatically for each week of winter to the 1·5 million pensioners on supplementary benefit and to the further 1 million or so who live on the margins of poverty. That is the only way to guarantee that necessary help at the level required reaches those who need it most when it is required. We believe that our programme of commitments would significantly reduce the scourge of hypothermia and cold-related deaths in our society, and we are proud of that claim.
I am sure that the Minister will ask where all the money is to come from. The answer is that it is all a matter of the Government's priorities. This Government showed their sense of priorities when they spent £800 million in abolishing the investment income surcharge: a tax to which the only people liable are those with more than £100,000 of investments on the stock exchange. By contrast, our priority is to spend £150 million on trying to ensure that the frailest and poorest in our society are enabled to keep warm in winter.
Money alone is not enough. Many pensioners live in appallingly cold homes, because the accommodation is poor, badly maintained, draughty and damp, with virtually no insulation. We believe that weather-proofing and insulating homes, and installing central heating, would not only protect elderly people—which is reason enough—but would create jobs largely for the unskilled, and thereby help all low-income groups, as well as ensuring energy efficiency.
For all those reasons, we deplore the Government's decision under the Fowler Social Security Act to end single payments for draught-proofing materials in 1988. It will also put a stop to the excellent work done by Neighbourhood Energy Action, which in our view should be strongly supported for having draught-proofed the homes of nearly 250,000 pensioners and others, and providing work for 5,000 people on the community programme. I very much hope that the Government will reconsider that extremely wretched and unfortunate decision.
These miserable little regulations—that is what they are—will do little or nothing to remedy the appalling but preventable scandal of hypothermia and cold-related deaths among the elderly. If the Government cannot bring themselves to accept the unanswerable case for bringing together greater warmth for the elderly, weather-proofing, insulation of the nation's houses, and increasing energy efficiency, the next Labour Government very soon will.

The Minister for Social Security and the Disabled (Mr. John Major): The hon. Member for Oldham, West (Mr. Meacher) opened the debate in a more restrained fashion than has often been the case when he and I have discussed matters across the Dispatch Boxes, and I am grateful to him for that. It may mean that we can examine the details of the regulations more carefully instead of simply exchanging statistics with which the House has become familiar.
I shall begin on a point of shared concern. There is no dispute between us or within the House about the concern that everyone feels for the traditionally high level of excess winter deaths in this country when compared with the level in several other countries. The hon. Gentleman will know that during the past 35 years there has been a steady reduction in the number of those deaths. That reduction has been continuous since 1959 with the exception of the period between 1976 and 1980, when a slight increase took place due to a variety of factors. However, I make no party point about that.
As the hon. Member for Oldham, West acknowledged, the problem is deep-rooted. However, the situation seems to be improving for a variety of reasons, and we hope that that trend will continue. Within that broad figure for excess winter deaths lies the smaller, but equally important, figure for hypothermia, to which the hon. Gentleman addressed some of his remarks. He acknowledged that the number of death certificates showing hypothermia as either a primary or secondary cause of death had stood at about the 1,000 mark for the past year.
The interesting point is that hypothermia is often shown not as a primary but as a secondary factor, which is attributable to reasons quite other than the insulation of the house or the amount of heating available. One of the interesting factors to emerge from the hon. Gentleman's speech was that, of those 1,000 deaths, about 640 were winter deaths, while the other 350 occurred in the summer, spring or autumn when hypothermia, which projects the image of people literally freezing, would be an unlikely proposition. That illustrates the point that hypothermia often appears as a contributory cause of death. For example, someone may have a stroke and be left immobile so that hypothermia becomes a secondary factor, which is unrelated to any action that any Government, however benevolent, could take. The hon. Gentleman's remarks put the hypothermia element into perspective, and I am grateful to him for that.
The excess winter mortality figures are startling. Between 1951 and 1955, the percentage of excess winter mortality was 68·2. By 1981 to 1985, the last period for which we have figures, as they are calculated broadly on a five-year trend, the figure had fallen to 29·3 per cent. The figure is still higher than I or the hon. Member for Oldham, West would like, but it represents a noticeable improvement which we hope and believe will continue.

Mr. Gordon Wilson: Does the Minister accept that the comparison should be made with other advanced countries in western Europe, and that in those countries the figures for excess winter mortality have dropped considerably over the years? By comparison, the United Kingdom's performance is utterly scandalous. Will he look at the files of his predecessors relating to meetings that I had with Ministers on the question of hypothermia? They refused to authorise research into the medical and hospital records of the Scottish Home and Health Department, which showed that many more people were hospitalised during the winter. A proper processing of those records would show that cold and the absence of heat contribute substantially to the discomfort and ill health experienced by the elderly.

Mr. Major: I understand the hon. Gentleman's point, but he bases his supposition on a premise that may not necessarily be true. His underlying premise is that the


cause of excess winter deaths may be a lack of heating or poor insulation, or a combination of the two. They may be contributory factors, but the research by Professor Keating and others has shown that a variety of outher factors, many of them not within the control of Government, may play a significant part. The reality is, as we said when we last debated fuel poverty a few weeks ago, that we do not know the true, underlying causes of excess winter mortality. We can see the trend going in the right direction and wish that to continue, but neither the hon. Gentleman, Professor Keating nor I can be entirely sure why the figures are as they are or why they are improving. We can simply observe that they are improving and continue to take action while hoping that the trend continues.

Mr. Wilson: The hon. Gentleman is a reasonable man, and there are many factors, not all of which can be affected by his Department. Will he take it into account that we do not know why the excess winter mortality rate in the United Kingdom is so much higher than in other European countries, because then there is a case for his Department authorising expenditure to cover research into those reasons rather than complacently accepting that the fall is occurring? I hope that we all accept that the fall is insufficient in view of the numbers who die.

Mr. Major: I appreciate the hon. Gentleman's point, and he will be aware that when we last debated this matter I said that the Department was looking at the underlying reasons. That will continue, but there is nothing further that I can say this afternoon.

Mr. Meacher: I can see that we shall have considered and careful debate and I welcome that. I accept what the Minister said about the slight decline in the differential deaths between winter and summer. However, the figures for deaths in which hypothermia is a factor over the past seven years show no decline. The figures for each of those years are 596, 939, 860, 717, 731, with the latest at 1,060.

Mr. Major: I think that in those figures the hon. Gentleman is again merging winter and summer, with the special factors that I mentioned. Winter deaths, which are the point of special political controversy underlying the debate, show no trend upwards or, alas, downwards in the broad measure of hypothermia-related winter deaths. A particularly high year was 1978–79. Taking the figures from memory, the average is 640 a year, and that has not materially altered over the past eight or nine years.

Mr. Campbell-Savours: Does the Minister not understand that he is playing with figures? One cannot measure the pain felt by those who do not die, but are discomfited. Does he not understand that there are hundreds of thousands, if not millions of people who want to keep their homes warm but cannot afford it? The Government give money away in tax cuts to the better off, but they fail to address themselves to this specific problem. All these figures are meaningless to such people, and the small amounts of money that the Department makes available are not relevant to the measure of their needs.

Mr. Major: The hon. Gentleman introduces a note of controversy so I shall make points that I would have left till later. The hon. Member for Oldham, West was gracious enough to concede the substantial increase in heating additions, specifically targeted at the most vulnerable. The hon. Gentleman will be aware of that, and

of the fact that primary help with heating is now, as it was when his party was in Government, through the supplementary benefit scale rates. These have increased materially in purchasing power since 1979. The third factor is so relevant that the hon. Member for Workington (Mr. Campbell-Savours) should bear it in mind. We now have not entirely, but nearly, stable fuel prices, which is a novel and welcome innovation that was not at all the position five or 10 years ago. All those three factors are material and helpful factors of considerable assistance to the people about whom both the hon. Gentleman and I are concerned. He might usefully bear them in mind.
The exceptionally cold weather payments are the trigger for the debate. They came into effect on 11 December and provide for a single payment of £5 for fixed weeks, in any area where the average temperature falls to minus 1·5 deg C or less. Those eligible will be supplementary benefit households containing someone who is 65 or over, under two or chronically sick or disabled. This is because they are the most vulnerable groups and it is upon them that we wish to target the available assistance.
The arrangements that we are discussing are to do with extra help in times of exceptional winter weather. I stress the word "exceptional" as I fear it is often taken to mean a regular occurrence rather than an exception. In considering the proposals, I hope that hon. Members and those outside will bear in mind the fact that these provisions have always played only a restricted part in the total help available for claimants. That is largely targeted in the way that I have just outlined. It is also relevant, when considering the present position, to bear in mind the short but turbulent history of the exceptional severe weather payments.
Some of the comments made recently suggest that many people have short memories about the controversial nature of those payments. Before 1980, all the indications are that extra help with fuel costs in periods of cold weather was seldom given. The hon. Member for Oldham, West will recall that, for there was a Labour Government at that time, and he was a Minister. However, there was no statutory entitlement, and the hon. Gentleman and his colleagues did not introduce one. Perhaps the winters were less cold, or perhaps their comments are more related to expediency than principle. Discretionary payments were made only on occasion, and there is little evidence that occasional payments were made, and no record of the frequency and amount of those payments, at least none available to me.

Mr. Meacher: The Minister said that he wanted to avoid party controversy, and I hope that he means that. It is true that there were not the equivalent of exceptional weather payments before 1979, but they were not needed because the pension was significantly higher as a proportion of average earnings than it is now. It is much better for pensioners to have higher pensions than to have a fleabite of exceptionally severe weather payments on a lower pension.

Mr. Wilson: They still died of hypothermia-related diseases.

Mr. Major: The hon. Member for Dundee, East (Mr. Wilson) has made the point crisply. People died of hypothermia-related diseases in the 1970s, and there was a high level of excess winter deaths in the 1970s. We have


just trawled over the statistics and they do not show the Labour Government in an escpecially favourable light compared with before or later. That is not greatly productive ground for us to go over again, although it is a covenient territory for both of us.
Regulation 26 of the Supplementary Benefit (Single Payments) Regulations was the first regulatory entitlement to assistance. That regulation, now replaced, was couched in fairly general terms. It referred to
a period of exceptionally severe weather
but it did not define it. It suggested a comparison of fuel consumption in bad and normal weather, again not clearly or properly defined, to decide payment. The regulation has proved to be all but impossible to operate. Every time it has been applied, it has been severely and, in my judgment, justifiably, criticised. Each time the criticism has led to a review of the advice to adjudication officers, with a completely new set of guidance then being issued. It has not been satisfactory, and it is worth setting out briefly the chequered history of this regulation, because it will put the present proposals in proper context.
The first time that the regulation was used, in 1981–82, the chief supplementary benefit officer issued guidance that it applied across the country. Single payments were made to cover the difference in consumption between that winter and the previous one. Where possible, this was calculated by comparing actual fuel bills, and where this was not possible a special formula was used.
Those arrangements were criticised on two main grounds that are relevant to the present regulations: first, the difficulty in defining a period of exceptionally severe weather and, second, determining the extent to which extra fuel consumption was caused by that severe weather. Those criticisms prompted a review of the guidance, to devise a more objective method of applying regulation 26. That result, too, was criticised in turn, since the mechanism devised meant that in order to qualify for help it had to be colder, in absolute terms, in those parts of the country where it was normally coldest than in milder parts of the country. I am glad that I carry the hon. Member for Oldham, West with me on that point.
That was absurd. It meant that in the winter of 1984–85 help was given in parts of England and Wales but not in Scotland, which was actually colder. Understandably, that led to considerable resentment, and it is not difficult to see why. If I had been a Scot, I should have resented it, too. The formula for calculating entitlement was also extremely complex. Very few claimants understood it, and I am not at all surprised.
The strength of feeling was such that the adjudicating authorities asked the social security commissioners to determine whether the guidance then in operation was or was not a correct interpretation of the regulations. Their response was no. That prompted yet further guidance in November 1985. This advised that decisions on whether the weather had been exceptionally severe should be made by adjudication officers in each local office and should be based on locally available information. Once a period of exceptionally severe weather had been declared, claims for single payments were to be assessed on the basis of the individual claimant's increased fuel consumption as a result of the severe weather.
This guidance was followed last winter and payments were made in respect of the prolonged cold spell last

February, but once again the guidance was severely criticised. As in 1982, one of the main criticisms centred around uncertainty as to whether the weather was exceptionally severe. Now that the decision was to be taken at local level, it was alleged that it would be determined by an adjudication officer
sticking his head out of the window.
In practice, there was great uncertainty as to what exactly constituted a period of exceptionally severe weather. That was resolved only when yet further guidance was issued, following which, adjudication officers throughout mainland Britain declared that the weather in February 1986 was exceptionally severe.
I set out that tangled tale simply to demonstrate beyond doubt the unsatisfactory nature of past provision and to illustrate the principal problems that need to be solved—[Interruption.] It is hardly a question of the Government having finally conceded that point. My hon. Friend the Minister for Health said a considerable time ago that these regulations were weird and wonderful. There has never been any dispute about their unsatisfactory nature. We have now produced precisely what many people, including Opposition Members, asked for when they criticised the regulations.
It was clear from the criticisms last winter that the old regulation 26 simply had to go. It was not a matter of further guidance; the regulation itself needed revision. What was needed was a system with clear rules for determining whether the weather had been exceptionally severe, who should be entitled to extra help and how much they should receive. We believe that the new scheme, which came into operation a week ago, achieves those objectives. It provides for a single payment of £5 for each and every week of exceptionally cold weather. That means that there is now no need to compare fuel bills for different years. There is no need to attempt to guess how much of a fuel bill is related to illness or to the use of additional appliances in the home. Moreover, there is no need to produce an unpaid fuel bill at the date of claim, so that claimants who settle their bills promptly, or who purchase fuel in advance, are not penalised.

Mr. Wilson: Does the Minister concede that one of the great faults of the new scheme is that it does not take into account the variations in climate in the United Kingdom, except in so far as an absolute basic temperature of minus 1·5 deg C has been chosen? Does the Minister not agree that hardship is caused to tens of thousands of elderly people because there is a uniform level of benefit throughout the United Kingdom, although it costs 20 per cent. more to heat a house in Glasgow than it does to heat a house in Bristol and 30 per cent. more to heat a house in Aberdeen than it costs to heat a house in Bristol? Therefore, would it not have been better to recognise the diversity of climate in the United Kingdom and to introduce a generous scheme to take those factors into account?

Mr. Major: The hon. Gentleman will concede that the key criterion is temperature. However, temperature is not the only criterion. The cost of heating a home depends upon a variety of other matters: the precise situation of the home, the degree of insulation, the quality of the building and energy efficiency grants, which are the responsibility of the Department of the Environment. It is not simply a matter of temperature; there is a whole series of related factors. It would not be equitable to suggest that a


particular area required a higher level of weekly payment for that particular reason. I understand the hon. Gentleman's argument for a cold climate allowance, but I fear that I have been unable to accept it.
Payments under our new proposals will be available when a period of exceptionally cold weather is declared for an area. We have sought to ensure that the new rules are much simpler and clear-cut. Each local office is linked to one of 63 weather stations around the country. If the average weekly temperature recorded at that weather station over a seven-day period, from Monday to Sunday, is minus 1·5 deg C or less, a period of exceptionally cold weather will be declared in the linked local office areas. A declaration will be made speedily at the end of the relevant seven-day period. The weather stations have been carefully chosen to ensure that, among other things, they are able to provide that information quickly.
Those who will be eligible for these payments will be supplementary benefit households containing someone who is 65 or over, or under two years old, or chronically sick or disabled. They are the people who are most at risk from cold weather.
I must briefly remind the House of the general welcome that the Social Security Advisory Committee gave to our proposals. It said that the proposals represented a significant improvement on previous schemes, that they were simpler and easier to understand and that they would lead to more certainty of payment. All those are relevant factors, which the House should bear in mind.
The committee agreed also that simplicity and ease of operation should be major requirements of the new scheme and it welcomed the proposal to introduce a standard amount of payment and to eliminate the need to compare previous fuel bills, which it considered to be a particularly welcome simplification. It agreed, too, that an absolute standard of coldness, rather than a comparative basis, should be a fundamental requirement of the new scheme.
Finally, the committee showed that it understood clearly the meaning of the word "exceptional". It said that a system which allowed for a period of exceptionally severe weather to be declared on average every two years, for example, could hardly be described as catering for exceptional weather conditions. In its detailed comments, therefore, the Social Security Advisory Committee gave significant support to the main elements of our proposals. I am bound to say that those who occasionally quote the committee when it is critical of the Government have been silent on this occasion.

Mr. Meacher: The Minister is preening himself on having the support of the Social Security Advisory Committee, but he is taking amiss the thrust of its comments. According to my reading of the SSAC's comments, it seems to be saying that it does not regard this scheme as ideal. However, given that the Government have insisted that it should be an "exceptionally" severe weather payment, the committee accepts that the payments should not be reviewed every two years. However, the committee does not accept that it is desirable. The committee does not believe that the scheme is adequate and it would be wrong to construe its remarks in that way.

Mr. Major: I do not recall using the word "ideal", and I am sure that Hansard will record the fact that I did not

use that word. I set out the material advantages of this scheme compared with its predecessors, whose disadvantages are understood and which I outlined to the House.
We made two specific changes in the light of the committee's more detailed comments. Firstly, the time limit for making a claim was extended from four to 13 weeks. Secondly, we have provided for one claim to be treated as a claim for consecutive weeks of exceptionally cold weather. Some concern was expressed about whether the effect of regulation of the single payments regulations, which refers to there being a need for the item in question, might prevent payment when the fuel bill had been paid. The regulations now in force specifically cover the concern expressed and ensure that payment is permissible in such circumstances. That will be generally welcomed.
The Committee also spoke about the importance of publicity arrangements and I agree with it about that. Since the new system will give help in the local areas that are coldest, the main thrust of publicity must necessarily be local and must alert people to help. Revised instructions which give detailed guidance on action to be taken are being issued to local offices. Local offices are to be instructed to place advertisements, which include a claim form, in the local press. In addition, leaflets, again incorporating a claim form, and posters will be distributed to as many local advice and information centres as possible. These will include social services departments, housing benefit offices, jobcentres, health centres, general practitioners' surgeries, gas and electricity showrooms, advice bureaux, libraries and other centres of information. Our local offices will also be instructed to display the leaflets and posters in their reception areas, and information will be available on the DHSS Freephone service.
Regional information officers will be briefed and available to appear on local radio and television programmes to publicise the availability of payments. Therefore, we have arrangements in hand to provide proper publicity whenever necessary. I do not rule out measures in addition to those that I have mentioned if these prove necessary.
The new arrangements will provide for a better system. There will be certainty through the objective criteria for deciding when an exceptionally cold period has occurred. The way that we seek to collect and disseminate information will enable it to be made known quickly that help is available, and there are now clear rules on who will be entitled to extra help. Finally, there will be a known, clear flat rate payment of £5 for each week of very cold weather without the need to worry about comparing past and current fuel bills. I am confident that the new arrangements in force provide a fairer basis for help in what is and always has been a limited part of assistance with heating for vulnerable groups. I ask the House to endorse that proposition and reject the prayer.

Mrs. Elizabeth Shields: Severe weather payments have rightly been debated in this House in recent weeks. The correlation between very low temperatures and the deaths of elderly people has been well documented since the 1960s. Following the particularly hard winter of 1985–86, the new system of payments for exceptionally cold weather announced by the DHSS last month and now in force are a step in the right direction.
The number of deaths between January and March this year rose considerably compared to 1985. In February, there were about 7,000 more deaths than expected and in a very cold spell of weather in March in one week nearly 16,000 people died. Many elderly people survived that cold weather, but suffered extreme hardship. It is estimated that about 578 hypothermia related deaths occurred during the period, and that is an average of about six a day. Disturbing as they are, those figures probably underestimate the true number of deaths resulting from this disease. Many cases go undiagnosed and death certificates are not necessarily a perfect guide to the number of people who have died from the cold.
As hon. Members have already said, not all deaths are attributable to hypothermia because intense cold tends to thicken the blood and causes heart attacks, strokes and respiratory diseases. Even long waiting times at bus stops can mean that old people literally catch their death of cold. Professor Keating, who has already been mentioned, said that the main exposure to cold outside the home was encountered in waiting for a bus. However, many deaths from cold in the home are avoidable, as is shown by international comparisons. Many countries, such as Finland and other Scandinavian countries, have colder temperatures than those in Britain, but they manage to safeguard the lives of their frail citizens rather better than we do.
I welcome the new exceptionally cold weather payments, but there are still too many restrictions which, taken to their logical conclusion, could prove difficult to put into practice and may even be somewhat ridiculous. One must remember that the problems and complexities associated with the claiming of this benefit may well prevent those people genuinely entitled to claim the benefit from so doing. Many old people do not want the hassle of form filling and sometimes further means testing.
As has been said, under the new scheme a payment of £5 is to be made to households of which one member is aged 65 or over or, at the other end of the scale, is under the age of two years. When a child becomes two in midwinter, does it mean that the child has suddenly become hardened overnight because of a second birthday? I hope that in such cases the allowance will be carried through at least to the end of March.
The payments will also be made on a basis of extremely cold weather—that is to say, weekly cold weather measured from Monday to Sunday. Does that mean that if a cold spell begins and ends on a Wednesday, claimants will not be entitled to the £5? Surely we all appreciate that in Britain we do not enjoy climate but have to endure weather that is unpredictable and no respecter of the days of the week.
There is another disadvantage. It is that any pensioner who has savings of £500 will not qualify for the allowance. Some 40 or 50 years ago £500 was a real nest egg, but half a century on it is a small capital sum and far too low an amount for the elderly to risk. In order to protect such savings, many old age pensioners will turn down the heating and hope to get by on less warmth.
The heart of the problem is that only about 43 per cent. of our elderly people have central heating and many old-age pensioners still live in substandard and often badly insulated houses. The Government have certainly

encouraged schemes for the insulation of lofts, and currently provide 66 per cent. of the cost or £95, whichever is the lesser, and give a 90 per cent. grant to households in which there are pensioners or disabled people on supplementary or housing benefit. As many hon. Members may have found, those grants tend to be taken up by those who are somewhat better off rather than by pensioners who are living solely on a state pension and have no other private source of income.
The long-term key to this problem lies in sufficient, adequate housing for people of all ages, but with priority for the elderly, the disabled and the very young. There is a shortage of rented accommodation in my constituency and, indeed, all over Britain. Some 2,000 applicants are on the waiting list of Ryedale district council. I know one elderly lady living in a small terraced cottage who urgently needs a supply of hot water, a proper kitchen and bathroom, and central heating. She is 79 and very frail, but still has to fetch and carry coal for a fire which by no means heats her small living room. There is a centrally heated vacant flat in a block of fairly new council properties, but there are at least a dozen hopefuls for that flat, so her chances are small.
District councils should be allowed to make greater use of their capital receipts for new build, central heating and proper insulation, especially for the elderly, so that the councils can help to reduce the cost of special payments which the lack of proper housing necessitates.
One good scheme to help protect its senior citizens from hypothermia this winter is being run by Adur council in West Sussex. The council is inviting members of the local community to match pound for pound every public donation to what is called the Adur Warm Campaign. It aims to provide a £20 fuel gift voucher to its 1,500 elderly residents most at risk in cold weather. Gas and electricity boards have agreed to accept the vouchers as payment for heating bills, and the Solid Fuel Advisory Service has said that local businesses supplying other fuels such as oil, coal and paraffin will also accept the vouchers. Adur businesses, community groups and organisations are being asked to help, and Age Concern and Warm Aid are working closely with the council in this venture. I am sure that the Minister and hon. Members will agree that this is an excellent venture which could be copied. I am also pleased to mention that, because Adur is a Liberal-led council.
Perhaps the best outcome of the debate will be to publicise once again, nationally, the very real dangers of extreme cold weather to elderly people in particular, and to motivate local councils, groups and individuals in their own areas to keep a special watch out for their elderly neighbours and acquaintances so that no unnecessary deaths occur this winter.

Mr. Patrick Nicholls: I hope that the hon. Member for Ryedale (Mrs. Shields) will not take it amiss if I do not follow her sequence of points because, in what will be a short debate, I want to make one or two points of my own. However, I assure the hon. Lady that I shall make one or two remarks about what pensioners may expect from an alliance Government, should such a bizarre event ever come to pass.
I start by finding a fair measure of agreement between myself and the hon. Member for Oldham, West (Mr. Meacher). I am sure that there is a fair amount of


agreement between us, which, even if it went no further, would centre on the fact that with the most vulnerable members of society—those pensioners who are dependent on a retirement pension, topped up, no doubt, with supplementary benefit—Government have an obligation to ensure that they get it right. I am certain that that is the common ground between the hon. Gentleman and myself, and even if our agreement went no further than that, it would be something. The difficulty is that those words are easy enough to say. However, people outside the Chamber, namely pensioners, have to ask themselves, "What gives us the best prospect of seeing that rhetoric carried into reality?"
When the hon. Gentleman broadened his arguments on heating additions and exceptional weather payments to discuss the retirement pension he made a point that was dangerous for him, but which was nevertheless significant. I am sure that he would like to discuss that and it is again probably common ground between us. However, I shall not embarrass him by finding too much common ground.
Nobody would ever try to suggest that the energy requirements of elderly people should be met entirely by a payment here and a payment there, and by the use of a thermometer in certain circumstances to provide a little bit more. That is not how we look after pensioners. We do so by providing a proper rate of retirement pension.
It would be pie in the sky to suggest that we shall ever reach the position where a person who is on a retirement pension receives pretty much the same amount of money as anybody else. That will not happen and I doubt—though we shall see—whether Opposition Members would say that. The state must make a judgment about how much it can afford to give pensioners. Pensioners are right to ask themselves, "What is on offer? What are the promises?" In trying to assess the worth of those promises, it is worth looking at what has happened before.
The last thing that I want to do is to be unfair to the hon. Gentleman about his opening remarks. It was sad that they lacked a certain amount of the usual rant, but they did include those familiar noughts. I shall not attribute to the hon. Gentleman how many hundreds of millions of pounds he will spend on pensioners because, give or take a few noughts, it will be a great deal. We have heard it all before, we heard more than a hint of it today and we shall hear more about it during the election campaign. If that is what is on offer, the reality is slightly different.
History can sometimes be very unkind and it has been unkind tonight in bringing the hon. Gentleman here because he is in an almost unique position. The hon. Gentleman is the Opposition's main spokesman on social security matters—hoping, no doubt, that when the impossible happens he will be the Secretary of State for Social Services in a Labour Government. The problem is that at the back of his mind he is aware of a terrible embarrassment. Once upon a time—it seems so long ago now—he was a Minister responsible for social security in a Labour Government.
I am sure that the hon. Gentleman understands pensioners' needs and the way in which hypothermia can affect us all. Nothing has changed; pensioners' needs today are exactly the same as they have always been. When the hon. Gentleman sets out his prospectus for the future of pensioners he knows that nothing has changed. Cold is cold and old age is old age. Perhaps, because of his ministerial experience, the hon. Gentleman knows better

than most. Will the promises that the hon. Gentleman has made tonight and the assurances that he has given pensioners that, when he achieves office, everything will be as in the land of milk and honey, become reality? The hon. Gentleman talks about how high pensions were in real terms under the previous Labour Government—that is what he says—but he was not a pensioner.

Mr. Frank Cook: When does the hon. Gentleman ever listen to pensioners?

Mr. Nicholls: The hon. Gentleman rambles on from a sedentary position, I am sure that we all look forward to hearing his speech in due course, and that we shall follow every word of it with rapt attention. For the time being, the attention he is giving my speech has reminded me of what will be the next point in my speech.
It is worth bearing in mind what pensioners thought of their pensions at the time. I detect some blushing and misgiving on the face of the hon. Member for Oldham, West. I wonder why? I may be able to help the hon. Gentleman by asking him to cast his mind back to February 1975. The hon. Gentleman will remember that fairly well and I am sure that his press cuttings will remind him of that time. In February 1975 the hon. Gentleman addressed a meeting, not in this House where the standards of decency, decorum and good will to all men on each side of the House are by the by and are taken as understood, but a few hundred yards away in central hall, Westminster. There was not the amity and friendship there that I extend to the hon. Gentleman on this festive occasion. He was speaking, not to people who were talking about pensions as I am and not about people promising what they would do in the future. He was talking to people living on old age pensions. Were they pleased to see him?

Mr. Nicholas Soames: No.

Mr. Nicholls: No, they were not. I cannot imagine that my hon. Friend was there in a professional capacity, because he seems too young and charming.
The hon. Gentleman was addressing a meeting of pensioners. At that time—the hon. Gentleman will correct my chronology if he wants to—the hon. Gentleman had not announced to the House that he was yet again abolishing the Christmas bonus to help pensioners with their fuel bills.

Mr. Soames: Will my hon. Friend give way?

Mr. Nicholls: Not now, although I shall in a moment.
The record shows—my hon. Friend may be able to confirm it—that pensioners were so outraged by what the hon. Member for Oldham, West had done that he had to be rescued from the hall because the warlike pensioners wanted, to use a phrase, to take him outside.

Mr. Soames: Does my hon. Friend remember what reasons the hon. Member for Oldham, West (Mr. Meacher) gave for stealing the Christmas bonus from the pensioners?

Mr. Deputy Speaker (Mr. Harold Walker): Order. We are getting rather a long way from cold weather payment s, and I wish that we could return to that subject.

Mr. Nicholls: Without straying beyond the bounds of what may be in order, Mr. Deputy Speaker, it may be that one of the things that the pensioners were saying was that


when they had to consider budgeting for the extremely expensive cost of energy at that time, they were not greatly aided in that endeavour by the loss of their bonus.
The hon. Member for Oldham, West tries to pretend that he is the pensioners' friend. He need not take my word for it, but the fact is that when he was in office he had to be rescued from pensioners because they knew the reality.
We have heard a great deal from the hon. Gentleman about how the Government have cheated the pensioners by reneging on the arrangement which Labour had. The Conservative party and the Government have never thought that one serves the interests of pensioners well by promising them the moon and giving them something rather less. The fact is that, when the hon. Gentleman's party was in government and dealing with elderly people with the ailments to which the flesh is heir, it said that it would give them a pension increase that was based on earnings. It did for a time but of course, the trouble is that it did not last. Christmas does not last for 365 days of the year.
The Labour party might have served its electoral purposes at the time, but the reality is very different. Having gone to those poor, grey-haired people in the twilight of their years and said, "Vote for us. There will be an earnings link", what happened? In 1976 pensions were raised by less than the increase in prices or earnings. In November 1978 the Labour Government gave a pension increase of 11·4 per cent., although earnings rose by 13 per cent. In March 1979 the Labour Government proposed a pension increase of 12·8 per cent., when earnings were rsing by about 15 per cent.
That was reality for a pensioner then. First of all there was a Father Christmas Government which promised that one's pension would keep up with earnings; then, suddenly, at a stroke, the Minister responsible for implementing the legislation that he had passed would not enforce it. When a publication called Pensioners Voice—its voice must have been frail and muted by then—approached the then Secretary of State for Social Services in a Labour Government it asked, "What about it? What about your legislation? Remember, you passed it. You gave us this legislation which would give us an earnings link." What did the Secretary of State say? He said:
There is a statutory obligation to take these figures (i.e., earnings) into account, which was done, but no statutory obligation to get it right.
That really is marvellous. That is really something that pensioners can look forward to.
Although statements so blatant and cynical as that will excite a degree of derision bordering on humour, the reality is that there was a Government who, I do not doubt, were compassionate—we all know about the hon. Gentleman's compassion; he sprays it around by the bucketful—and cared, but the reality was that they passed legislation that they were simply unable to implement. Then they had the brass nerve to turn round to pensioners and say, "Right, we have taken it into account, but we were not able to get it right."

Mr. Meacher: Will the hon. Gentleman give way?

Mr. Nicholls: Yes, gladly I am pleased that I have been able to prick the hon. Gentleman's memory.

Mr. Meacher: In the comic and childish interlude that passes for a speech, will the hon. Gentleman acknowledge

that, despite all his remarks, the net effect was that at the end of five years the value of the pension in real terms, after taking account of inflation, had risen by 20 per cent., and that is after taking account of all the factors that he has mentioned? Whereas after seven years of Tory Government, it has increased by only a paltry 3 per cent.

Mr. Nicholls: I am greatly saddened that the hon. Gentleman should feel obliged to reply in those terms when I gave way hoping that he would deny that the Labour party had ratted on its own arrangements. I wondered whether I had that quotation wrong and the Secretary of State had said something else.

Mr. Deputy Speaker: Order. I welcomed the hon. Gentleman's intervention in the hope that he was going to lead us back to cold weather payments. I hope that we can get back to them.

Mr. Nicholls: I am sure that we can, Mr.Deputy Speaker. I apologise for the fact that I was led astray.
The point that, I am making is that when Labour Members talk about the ability of pensioners to manage their money so that they can pay for their energy needs, that, as the hon. Gentleman rightly conceded, has to be looked at in relation to the pension. I have pointed out only the worst of the fiddles. It may well be that the hon. Gentleman, or whichever of his colleagues applies to the debate, will be able to tell pensioners how the necessity to care for themselves in cold weather was helped by switching the method of calculation of the old age pension from the historic to the forecasting method. If the hon. Gentleman is wondering why that was done, he need look no further than Barbara Castle's diaries to see that it was not to help pensioners, but to save money.
When pensioners are trying to meet their energy costs it is not just the pension or special payments which are relevant; it is also their savings. Many pensioners do have savings put by. The hon. Member for Ryedale said that £500 was not much of a nest egg. I do not know how attractive that would be to many old age pensioners who do not have £500 as a nest egg, but be that as it may. But under the previous Labour Government pensioners' savings were wrecked. The hon. Gentleman has said nothing to us about that.
When the hon. Gentleman was talking about severe weather payments, another thing that he failed to mention was the cost of energy. It is fairly understandable why we did not hear too much about that. Again, under the previous Labour Government the price of energy rose massively. Let me help the hon. Gentleman by reminding him of the figures. Since the previous election, domestic gas and electricity prices have fallen in real terms—gas by 7 per cent. and electricity by 10 per cent. In cash terms since the previous election, the price of gas has increased by about 3 per cent. a year. By contrast, under the previous Labour Government it increased about four times as fast. Electricity prices have increased by about 2 per cent. a year under this Government. Under the previous Labour Government it rose 11 times as fast, or as much in six months as at the moment we have had in about three and a half years.
That is the reality for pensioners or those on a fixed income. More than anything else, they need a Government who can make a commitment which they keep. This


Government have kept to their commitments. They need to know that energy prices will be stable and that their savings will not be wrecked by inflation.

Mr. Campbell-Savours: Does the hon. Gentleman not understand that people on fixed incomes are so concerned about these matters that they have become a group of people who favour higher interest rates? We now have a group of people in society who are saddened when the minimum lending rate falls because they believe that it is a loss of income to them. Is it not an indictment when we build into our structures a group—

Mr. Deputy Speaker: Order. We are debating cold weather payments and I hope that we shall eventually do that.

Mr. Nicholls: Again, without going down the byroads along which the hon. Gentleman was seeking to lead me, I can say that we have created a body of people who know that they will be dependent—some of them soon, some of them rather later—on a state retirement pension for the rest of their lives. One of the things that they will be concerned about is that the older they get the more their energy costs will matter to them. They will know that and they will—to be blunt—ask themselves who will give them the best deal and on whom can they rely.
It is not good enough for the hon. Gentleman to ignore and forget, and hope that the rest of us do the same, what his party did in office. It is not sufficient for him to hope that we shall forget why the calculation of the pension was switched from an historic method to a forecasting method. It is not sufficient for him to hope that we shall forget that the Labour Government implemented legislation and then spent the next few years wriggling out of it. We must concern ourselves with the fact that the Labour party may yet be able to get away with it, because the pensioners upon whom those tricks were performed have now, for the most part, been called to glory. The people who may be pensioners by the time we come to the next election are the sort of people who have no cause to remember what the 1970s were like because at the time they thought they were a long way from pensionable age.
I realise that in making these few remarks I have for a moment been unfair to the hon. Member for Rydedale because I promised that I would say something about the points that she raised that we might have to look forward to from a Liberal or alliance Government. The marvellous thing about severe weather payments, and many other matters, for the alliance, is that it usually tries to say that it has no record to be judged by. It can be sweetness and light to everybody — a problem which would not normally confront Opposition Members.
In this case, however, the alliance does have a record and we do not just have to look at what is happening in one or two obscure local authorities. When the Labour Government were performing such deceptions and trickeries, not as a result of any lack of compassion on the Opposition Benches but because of sheer fiscal ineptitude and the inability to generate the money that would take care of severe weather payments and such matters, they were kept in office, not by the Conservative party but by the Liberal party of that day. If the Opposition Benches swell and other Members come in to join the hon. Lady in her splendid isolation and try to dissociate themselves from the Labour party's record on this, they must be

reminded that when they had the ability to choose they supported a Labour Government in such tricks and deceptions.
I started by saying that I saw common ground between myself and the hon. Gentleman. I hope that in terms of what we try to do, I can. But there is another common ground that will not go away. It is the record of past promises, recklessly made to win general elections, blatantly disregarded when the Labour party took power. The hon. Gentleman thinks that history has come full circle in putting him where he sits today. I respectfully suggest to the hon. Gentleman that it will not take him one jot further.

Mr. Frank Cook: After enduring that pathetic episode from the hon. Member for Teignbridge (Mr. Nicholls)—a display of what my mother would have described as a most accomplished blatherskite—I prefer to return to the main subject of our debate this evening—exceptionally cold weather payments. My hon. Friend the Member for Oldham, West (Mr. Meacher) has outlined most capably the reasoned case for the annulment of this instrument.
The Minister commenced most graciously by welcoming the tone of my hon. Friend the Member for Oldham, West. However, the sugar soon fell from his words as he went about his business in his customary caustic fashion. However, he did invite us to "examine the details" for once. I am plesed that he has now returned to the Chamber because I would welcome his listening with some care to what I have to say. I would like nothing better than to examine the details with the Minister around a table together with representatives of the voluntary organisations that are saddled with the consequences of the circumstances we are discussing, representatives from the Department of Health and Social Security and perhaps one or two members of my own organisation, the Teesside Pensioners Association. I am sure that representatives from that association, in discussing exceptionally cold weather payments, would give the Minister an exceptionally warm reception. In fact, they may take issue with him on his period of exceptionally cold weather which is characterised as
a period of 7 days beginning on a Monday and ending on the following Sunday".
That is stated as if it is some charitable giveaway. One does not have to be a great mathematician to point out that that definition could well refer to an exceptionally cold weather period lasting 19 clays and that, effectively, it is a way of denying a week's payment to any pensioner who may qualify for it.

The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Nicholas Lyell): indicated dissent.

Mr. Cook: I see the Minister shake his head. I would welcome the opportunity to discuss this in greater detail, either now or later.
I wish to raise with the Minister a much more specific reference related to my own constituency of Stockton, North. I have scoured the document for mention of my constituency, but all my best efforts are to no avail for there is no such mention. Those more readily satisfied with a little learning and who can stay awake for a moment would counsel no cause for alarm by quoting section 4(b) of new regulation 26A which states:
where the home of the assessment unit"—


I hope the Minister is listening.
where the home of the assessment unit is not situated within an area described in column (2) of Schedule 2A, it shall be treated as situated within the area described in that column which is nearest to it.
Would that it were quite so simple.
The crucial phrase is:
shall be treated as situated within the area described in that column which is nearest to it.
The obvious solution would seem to be the issue of ordnance survey maps and scale rules to enable adjudication officers to determine which is the nearest point on the district boundary and which area is the neighbour to that point. Even that would be relatively straightforward.
However, thoroughly to understand the problem I am trying to present one needs to know that Stockton is bounded to the north-east by the borough of Hartlepool, whose district officers must make reference to the national climatological message station at Whitby coastguard, whereas the northern, western and southern boundaries of my constituency have as their neighbours the part district of Sedgefield and the districts of Hambleton, Richmondshire and Middlesbrough, all of which are required to use the inland station of Leeming.
One does not need the skills or expertise of an interstellar cartographer to realise that such predetermined circumstances can give rise to a situation that would be not only ridiculous but reprehensible. I refer, of course, to the prospect of close neighbours in the same geophysical location and suffering similar socio-economic deprivation being subject to evaluation on statistics that are quite different.

Mr. Soames: This is lunacy.

Mr. Cook: The hon. Gentleman may well express his boredom. I suggest that he should return to the bar that he left only five minutes ago before inflicting his presence upon us.
Under the original regulations, the Stockton office of the DHSS came wholly under the Leeming criteria so this anomaly did not apply then. Hon. Members may think that it is small beer my raising the question now. Hon. Members following my line of argument may be tempted to consider that the points are nit-picking — [Interruption.] The hon. Member for Crawley (Mr. Soames) is trying to interject again and saying that my statement is "bloody stupid". I am sure that the Teesside Pensioners Association—

Mr. Deputy Speaker: Order. Plain language is one thing, coarse language is another. I am sure that the hon. Gentleman would prefer not to use that expression.

Mr. Cook: I am grateful for your guidance, Mr. Deputy Speaker. I am simply repeating the statement made by the hon. Member for Crawley. If he seeks to withdraw it I shall gladly accept his withdrawal. I am sure that the pensioners of Stockton, North, whom I represent, will note his remark with great interest and I am sure that the pensioners of his own constituency will also take note.
However, as I have said, hon. Members making the effort to follow my argument may be tempted to consider these points as nit-picking. In case that is so I offer some simple facts to illustrate the stupidity. Since 1981 the Leeming station has had seven periods of exceptionally

cold weather. In the same period the Whitby coastguard has recorded only two. Therefore, added to the administrative chaos caused by the proliferation of scale rules and survey maps, we will have, if the measure remains in force, the gross inequity of one constituent qualifying for exceptionally cold weather payment while his next-door neighbour may not. As the hon. Member for Crawley said, it is stupid. In truth, it is even more ludicrous although most certainly not laughable.
One constituent in the north of my constituency will be assessed on the same basis as someone in Humberside while his fellow elector from the south side of the same Stockton street will be subject to the same data as are applied to a claimant from Castle Morpeth in Northumberland. That is a geographical difference approaching 140 miles. It is sheer madness.
The situation I bring to the attention of the House is only the latest in a long line of instances where the Government seek to pinch pennies from the poor and deprived. This week alone we have seen several instances of that sort of mentality, and this is the week before Christmas. If Christmas means anything, it should last 366 days not 365, as the hon. Member for Teignbridge (Mr. Nicholls) said. There are 365¼ days in a year. If Christmas means anything, this regulation should be annulled tonight and Christians on the Conservative Benches should vote for that annulment.

Mr. D. N. Campbell-Savours: I want to make an unashamedly simple speech because these matters are very simple and the public outside are concerned about the way in which the Government hide behind complicated indices to prove their statistical case when, indeed, they know the truth.
Last weekend I visited the house of one of my constituents in the town of Maryport. When I walked in the door the first thing that struck me—many might say that we are not even in the cold part of the year—was how cold the house was. As I invariably do, because I love heat, I asked how they managed live in that way. I was told quite simply that they could not afford to heat their home.
In that house both the parents were out of work and there were two children. I went there to discuss a case totally unrelated to this matter. It was to do with another affair where the Government have responsibility. I sat listening to them wondering to myself, how it was possible in these times for people to live in these conditions? I hear Government Back Benchers say things such as, "You should compare your pension with our pension," and various other arguments. All such comparisons are irrelevant. What matters is that the march of progress demands that we set different criteria.
The march of progress required that in 10 years we moved from mechanical systems to chip systems, perhaps by way of the transistor, and the state should set higher standards in what it believes is necessary for people, including the conditions in which they live. Unfortunately, we still set and use criteria that have existed for decades. We must look forward and not make comparisons with the past. An analysis that is based on the past is irrelevant and invalid. We should be thinking of how we intend to raise the living standards of millions, and especially the heating of their homes. Clearly the heating of homes is a living standard. For many people heat is as important as food. There are those in my constituency—

Mr. William Cash: Will the hon. Gentleman give way?

Mr. Campbell-Savours: No, I shall not give way to the hon. Gentleman because I am conscious that the Minister wishes to reply. The Minister will reply at the conclusion of my speech.

Mr. Cash: rose—

Mr. Campbell-Savours: There are those who fail very often—this happens in my constituency—to feed their children properly—

Mr. Cash: rose—

Mr. Campbell-Savours: —and for many reasons they arc failing similarly to heat their homes.

Mr. Cash: Will the hon. Gentleman give way?

Mr. Campbell-Savours: I put a simple proposition to the Minister—

Mr. Cash: Will the hon. Gentleman give way?

Mr. Campbell-Savours: Does the Minister accept that £5 per house over a five-year period—

Mr. Cash: rose—

Mr. Deputy Speaker: Order. The hon. Member for Stafford (Mr. Cash) must not persist in that fashion.

Mr. Campbell-Savours: Does the Minister accept that £5 perhaps once every five years for my constituents, as set out in annex B of the very good report that deals with the proposals for exceptionally severe weather payments—the facts are set out in the report and the truth is that my constituents receive a fiver once in five years—is insufficient to resolve the problem that confronts many people?

Mr. Cash: rose—

Mr. Campbell-Savours: I shall not give way to the hon. Gentleman. I intend to allow the Minister to reply in a few minutes and I shall not give way to the hon. Gentleman. The Minister wishes to reply to the debate.
There are many organisations in my constituency that are demanding higher standards. Many of Age Concern's voluntary workers report that they are concerned about people living in cold conditions in the winter months. There is an unemployment centre in my constituency and those who work there make representations to me repeatedly that those who use the centre daily, perhaps to fill their time during their unemployment, are complaining constantly that they cannot afford to heat their homes. There are social workers in my constituency who ask me privately, "Dale, what is going to happen? Why don't the Government understand that standards are changing in the 1980s and that what was perhaps good enough in the 1940s, 1950s and 1960s is no longer good enough?" Those who cannot afford to heat their homes know that down the road or in the next town there are those who can. They cannot understand why the great gulf or division has been allowed to open between those who can afford to heat their homes and those who cannot.
There is a responsibility upon the Government to bridge the gap that has opened but they refuse to do so. All that they are prepared to do is cut taxes for the better-off in our society. All Members of this place have received tax cuts over the past seven years of Conservative

government, but we know that there are many outside the House who cannot afford to live and are faced day by day, week on week and year by year with additional, niggling little Government measures that only depress further their living standards.

Mr. Jeremy Corbyn: rose—

The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Nicholas Lyell): There have been some distinguished speeches in this debate and, if I may say so, the hon. Member for Workington (Mr. Campbell-Savours) has asked a serious question which I shall seek to answer.
We are debating a scheme which is designed to give help to the most vulnerable in our society at a time when it is exceptionally cold. There will be common ground it the House that a reasonable scheme should fulfil the following criteria. First, it should operate when it is exceptionally cold, and in areas where it is exceptionally cold. Secondly, it must have clear standards. Thirdly, it must provide help in parts of the country where it is most needed and is very cold, and that takes up what the hon. Member for Workington was saying. Fourthly, it must be easy to understand. Fifthly, it must provide a definite amount of benefit. Sixthly and finally, it must be quick and easy to claim. No scheme is perfect, but the present one passes all the tests that I have set out and has won the approval and support of the Social Security Advisory Committee, which is the Government's independent adviser in these matters.

Mr. Meacher: Will the hon. Gentleman give way?

Mr. Lyell: I shall do so in a moment.
As I have said, no scheme is perfect, but it is against the six tests to which I have referred that any scheme should be judged.
The House will remember that we are discussing a scheme for exceptionally cold weather. It is based on a crude average of once in five years' coldness. It is not the basic means of support, which is the current levels of weekly benefits, including additions. These sums will be put into the basic scale rates and the special premiums in 1988.
The basic support—[Interruption.] The hon. Member for Workington made a thoughtful speech and I know that he will wish to listen to what I have to say. The basic support comes from weekly benefits, added to which are heating additions. As the House will recall, and as the hon. Member for Oldham West (Mr. Meacher) has rightly acknowledged, the heating additions have been a great deal more generous under this Government than they were under the previous Labour Government. They are up to £400 million per annum in money terms and £140 million more per annum in real terms, and these may be underestimates. It is against that background that I shall answer the questions that have been raised in the debate, but first I shall give way to the hon. Member for Oldham West.

Mr. Meacher: What is the figure within overall public expenditure that the Government have budgeted for the scheme for next winter?

Mr. Lyell: The hon. Gentleman will appreciate from his own experience that no one can forecast whether the coming winter is likely to be exceptionally severe. We shall find out in the next two months. The benefits are


demand-led, and over recent years the amounts paid out have varied from nothing to quite small figures, up to about £12 million. The overall budgeting figures, which are demand-led, are well capable of taking any likely figure into account.
I take up the remarks of the hon. Member for Workington. The House should remember that the scheme is based on a standard of coldness which is a crude average. One of the benefits of the scheme, as recognised by the Social Security Advisory Committee, is that it provides more help to the parts of the country that are the coldest. I realise that the charts show that the constituency of the hon. Member for Workington would receive help about once every five years. Other parts of the country that are not exceptionally cold—some city areas are much warmer than other areas—would receive help much less frequently. The tables show that some areas have received help for many weeks over recent years. One of the benefits of the scheme is that it helps areas that are especially cold.
I shall refer later and briefly to the comments made by the hon. Members for Ryedale (Mrs. Shields) and for Stockton, North (Mr. Cook). Most of the points made by the hon. Member for Oldham, West were rightly disposed of by the effective speech of my hon. Friend the Member for Teignbridge (Mr. Nicholls), who put the hon. Gentleman on notice as to the weakness of his arguments. If I had longer, I should like to put him on notice rather more clearly still.

Mr. Corbyn: rose—

Mr. Lyell: I shall not give way to the hon. Gentleman because he has not been in the Chamber for very long and he has not participated in the debate, as is true of most Opposition Members.
The hon. Member for Ryedale suggested that the dangers of extremely cold weather should be publicised. That is a good point. Professor Keatings, to whom the hon. Lady referred, has said that old people can look after themselves if they stay indoors and do not expose themselves to cold weather more than is necessary.
The new arrangements will provide for a better system. There will be certainty, through the objective criteria, in deciding when an exceptionally cold period occurs. The way in which we are collecting and disseminating information will enable it to be known quickly when help is available. I commend the system to the House.

Question put:—

The House divided: Ayes 171, Noes 265.

Division No. 47]
[6 pm


AYES


Abse, Leo
Boyes, Roland


Adams, Allen (Paisley N)
Bray, Dr Jeremy


Alton, David
Brown, Gordon (D'f'mline E)


Anderson, Donald
Brown, R. (N'c'tle-u-Tyne N)


Archer, Rt Hon Peter
Buchan, Norman


Ashley, Rt Hon Jack
Caborn, Richard


Ashton, Joe
Callaghan, Jim (Heyw'd &amp; M)


Atkinson, N. (Tottenham)
Campbell-Savours, Dale


Barnett, Guy
Canavan, Dennis


Barron, Kevin
Carter-Jones, Lewis


Beckett, Mrs Margaret
Clark, Dr David (S Shields)


Bell, Stuart
Clarke, Thomas


Bennett, A. (Dent'n &amp; Red'sh)
Clay, Robert


Bidwell, Sydney
Clelland, David Gordon


Blair, Anthony
Clwyd, Mrs Ann


Boothroyd, Miss Betty
Cook, Frank (Stockton North)





Cook, Robin F. (Livingston)
McNamara, Kevin


Corbett, Robin
McTaggart, Robert


Corbyn, Jeremy
McWilliam, John


Craigen, J. M.
Madden, Max


Crowther, Stan
Marek, Dr John


Cunliffe, Lawrence
Martin, Michael


Dalyell, Tam
Mason, Rt Hon Roy


Davies, Rt Hon Denzil (L'lli)
Maxton, John


Davis, Terry (B'ham, H'ge H'l)
Maynard, Miss Joan


Deakins, Eric
Meacher, Michael


Dewar, Donald
Michie, William


Dixon, Donald
Millan, Rt Hon Bruce


Dobson, Frank
Mitchell, Austin (G't Grimsby)


Dormand, Jack
Morris, Rt Hon A. (W'shawe)


Douglas, Dick
Morris, Rt Hon J. (Aberavon)


Dubs, Alfred
Nellist, David


Duffy, A. E. P.
O'Brien, William


Eadie, Alex
O'Neill, Martin


Eastham, Ken
Orme, Rt Hon Stanley


Evans, John (St. Helens N)
Park, George


Fatchett, Derek
Parry, Robert


Faulds, Andrew
Patchett, Terry


Field, Frank (Birkenhead)
Pavitt, Laurie


Fields, T. (L'pool Broad Gn)
Pendry, Tom


Fisher, Mark
Penhaligon, David


Flannery, Martin
Pike, Peter


Foot, Rt Hon Michael
Powell, Raymond (Ogmore)


Forrester, John
Prescott, John


Foster, Derek
Radice, Giles


Fraser, J. (Norwood)
Randall, Stuart


Freeson, Rt Hon Reginald
Raynsford, Nick


Garrett, W. E.
Redmond, Martin


George, Bruce
Richardson, Ms Jo


Golding, Mrs Llin
Roberts, Ernest (Hackney N)


Gould, Bryan
Robertson, George


Hamilton, James (M'well N)
Rogers, Allan


Hamilton, W. W. (Fife Central)
Rooker, J. W.


Harrison, Rt Hon Walter
Ross, Ernest (Dundee W)


Hart, Rt Hon Dame Judith
Ross, Stephen (Isle of Wight)


Heffer, Eric S.
Rowlands, Ted


Hogg, N. (C'nauld &amp; Kilsyth)
Sedgemore, Brian


Home Robertson, John
Sheldon, Rt Hon R.


Howell, Rt Hon D. (S'heath)
Shields, Mrs Elizabeth


Howells, Geraint
Shore, Rt Hon Peter


Hoyle, Douglas
Short, Ms Clare (Ladywood)


Hughes, Dr Mark (Durham)
Short, Mrs R.(W'hampt'n NE)


Hughes, Robert (Aberdeen N)
Silkin, Rt Hon J.


Hughes, Roy (Newport East)
Skinner, Dennis


Hughes, Simon (Southwark)
Smith, C.(Isl'ton S &amp; F'bury)


Jenkins, Rt Hon Roy (Hillh'd)
Smith, Rt Hon J. (M'ds E)


John, Brynmor
Snape, Peter


Johnston, Sir Russell
Soley, Clive


Jones, Barry (Alyn &amp; Deeside)
Spearing, Nigel


Kennedy, Charles
Stewart, Rt Hon D. (W Isles)


Kinnock, Rt Hon Neil
Straw, Jack


Lambie, David
Thomas, Dafydd (Merioneth)


Lamond, James
Thomas, Dr R. (Carmarthen)


Leadbitter, Ted
Thompson, J. (Wansbeck)


Leighton, Ronald
Wardell, Gareth (Gower)


Lewis, Ron (Carlisle)
Wareing, Robert


Lewis, Terence (Worsley)
Weetch, Ken


Litherland, Robert
Welsh, Michael


Livsey, Richard
Wigley, Dafydd


Lloyd, Tony (Stretford)
Williams, Rt Hon A.


Lofthouse, Geoffrey
Wilson, Gordon


Loyden, Edward
Winnick, David


McCartney, Hugh
Young, David (Bolton SE)


McDonald, Dr Oonagh



McKay, Allen (Penistone)
Tellers for the Ayes:


McKelvey, William
Mr. Sean Hughes and Mr. Ron Davies 


MacKenzie, Rt Hon Gregor



Maclennan, Robert





NOES


Aitken, Jonathan
Aspinwall, Jack


Alexander, Richard
Atkins, Rt Hon Sir H.


Alison, Rt Hon Michael
Atkins, Robert (South Ribble)


Ancram, Michael
Atkinson, David (B'm'th E)


Arnold, Tom
Baker, Nicholas (Dorset N)


Ashby, David
Baldry, Tony






Banks, Robert (Harrogate)
Galley, Roy


Batiste, Spencer
Gardiner, George (Reigate)


Bellingham, Henry
Garel-Jones, Tristan


Bendall, Vivian
Gilmour, Rt Hon Sir Ian


Benyon, William
Glyn, Dr Alan


Biffen, Rt Hon John
Grant, Sir Anthony


Biggs-Davison, Sir John
Greenway, Harry


Blackburn, John
Griffiths, Sir Eldon


Blaker, Rt Hon Sir Peter
Grylls, Michael


Body, Sir Richard
Hamilton, Hon A. (Epsom)


Boscawen, Hon Robert
Hamilton, Neil (Tatton)


Bottomley, Peter
Hampson, Dr Keith


Bottomley, Mrs Virginia
Hanley, Jeremy


Bowden, A. (Brighton K'to'n)
Hannam, John


Bowden, Gerald (Dulwich)
Hargreaves, Kenneth


Boyson, Dr Rhodes
Harris, David


Braine, Rt Hon Sir Bernard
Haselhurst, Alan


Bright, Graham
Hawkins, C. (High Peak)


Brinton, Tim
Hayes, J.


Brittan, Rt Hon Leon
Hayhoe, Rt Hon Barney


Brown, M. (Brigg &amp; Cl'thpes)
Hayward, Robert


Bryan, Sir Paul
Heathcoat-Amory, David


Buck, Sir Antony
Henderson, Barry


Budgen, Nick
Heseltine, Rt Hon Michael


Bulmer, Esmond
Hickmet, Richard


Burt, Alistair
Higgins, Rt Hon Terence L.


Butcher, John
Hill, James


Butler, Rt Hon Sir Adam
Hind, Kenneth


Butterfill, John
Hirst, Michael


Carlisle, Kenneth (Lincoln)
Hogg, Hon Douglas (Gr'th'm)


Cash, William
Holland, Sir Philip (Gedling)


Chalker, Mrs Lynda
Holt, Richard


Channon, Rt Hon Paul
Howarth, Gerald (Cannock)


Chapman, Sydney
Howell, Ralph (Norfolk, N)


Chope, Christopher
Hubbard-Miles, Peter


Clark, Hon A. (Plym'th S'n)
Hunt, David (Wirral W)


Clark, Dr Michael (Rochford)
Hunter, Andrew


Clark, Sir W. (Croydon S)
Jackson, Robert


Clarke, Rt Hon K. (Rushcliffe)
Jessel, Toby


Cockeram, Eric
Johnson Smith, Sir Geoffrey


Conway, Derek
Jones, Gwilym (Cardiff N)


Coombs, Simon
Jones, Robert (Herts W)


Cope, John
Joseph, Rt Hon Sir Keith


Cormack, Patrick
Kellett-Bowman, Mrs Elaine


Couchman, James
Kershaw, Sir Anthony


Cranborne, Viscount
Key, Robert


Critchley, Julian
King, Rt Hon Tom


Crouch, David
Knight, Greg (Derby N)


Dickens, Geoffrey
Knight, Dame Jill (Edgbaston)


Dorrell, Stephen
Lang, Ian


Douglas-Hamilton, Lord J.
Latham, Michael


Durant, Tony
Lawler, Geoffrey


Dykes, Hugh
Lawrence, Ivan


Edwards, Rt Hon N. (P'broke)
Lennox-Boyd, Hon Mark


Evennett, David
Lewis, Sir Kenneth (Stamf'd)


Eyre, Sir Reginald
Lilley, Peter


Fallon, Michael
Lloyd, Sir Ian (Havant)


Favell, Anthony
Lloyd, Peter (Fareham)


Fenner, Dame Peggy
Lord, Michael


Fletcher, Alexander
Luce, Rt Hon Richard


Fookes, Miss Janet
Lyell, Nicholas


Forman, Nigel
McCurley, Mrs Anna


Forth, Eric
MacKay, Andrew (Berkshire)


Fowler, Rt Hon Norman
MacKay, John (Argyll &amp; Bute)


Franks, Cecil
McLoughlin, Patrick


Fry, Peter
McNair-Wilson, M. (N'bury)





McNair-Wilson, P. (New F'st)
Shelton, William (Streatham)


McQuarrie, Albert
Shepherd, Richard (Aldridge)


Madel, David
Shersby, Michael


Major, John
Silvester, Fred


Malins, Humfrey
Sims, Roger


Malone, Gerald
Smith, Sir Dudley (Warwick)


Marlow, Antony
Smith, Tim (Beaconsfield)


Marshall, Michael (Arundel)
Soames, Hon Nicholas


Mather, Carol
Speed, Keith


Maude, Hon Francis
Speller, Tony


Mawhinney, Dr Brian
Spicer, Jim (Dorset W)


Maxwell-Hyslop, Robin
Spicer, Michael (S Worcs)


Merchant, Piers
Squire, Robin


Meyer, Sir Anthony
Stanbrook, Ivor


Mills, Iain (Meriden)
Stanley, Rt Hon John


Mitchell, David (Hants NW)
Steen, Anthony


Monro, Sir Hector
Stevens, Lewis (Nuneaton)


Morrison, Hon C. (Devizes)
Stewart, Allan (Eastwood)


Morrison, Hon P. (Chester)
Stewart, Andrew (Sherwood)


Murphy, Christopher
Stewart, Ian (Hertf'dshire N)


Neale, Gerrard
Stradling Thomas, Sir John


Needham, Richard
Sumberg, David


Nelson, Anthony
Tapsell, Sir Peter


Nicholls, Patrick
Taylor, John (Solihull)


Normanton, Tom
Taylor, Teddy (S'end E)


Norris, Steven
Tebbit, Rt Hon Norman


Onslow, Cranley
Temple-Morris, Peter


Oppenheim, Phillip
Terlezki, Stefan


Osborn, Sir John
Thompson, Donald (Calder V)


Ottaway, Richard
Thompson, Patrick (N'ich N)


Page, Sir John (Harrow W)
Thorne, Neil (Ilford S)


Page, Richard (Herts SW)
Thornton, Malcolm


Parkinson, Rt Hon Cecil
Thurnham, Peter


Patten, Christopher (Bath)
Townend, John (Bridlington)


Patten, J. (Oxf W &amp; Abgdn)
Townsend, Cyril D. (B'heath)


Pattie, Geoffrey
Tracey, Richard


Pawsey, James
Trippier, David


Porter, Barry
van Straubenzee, Sir W.


Powell, William (Corby)
Vaughan, Sir Gerard


Powley, John
Waddington, David


Price, Sir David
Wakeham, Rt Hon John


Proctor, K. Harvey
Waldegrave, Hon William


Pym, Rt Hon Francis
Wall, Sir Patrick


Raffan, Keith
Waller, Gary


Raison, Rt Hon Timothy
Wardle, C. (Bexhill)


Rathbone, Tim
Warren, Kenneth


Rees, Rt Hon Peter (Dover)
Watts, John


Rhodes James, Robert
Wells, Bowen (Hertford)


Rhys Williams, Sir Brandon
Wheeler, John


Ridley, Rt Hon Nicholas
Whitfield, John


Ridsdale, Sir Julian
Whitney, Raymond


Rifkind, Rt Hon Malcolm
Wiggin, Jerry


Roberts, Wyn (Conwy)
Wilkinson, John


Robinson, Mark (N'port W)
Winterton, Nicholas


Roe, Mrs Marion
Wolfson, Mark


Rossi, Sir Hugh
Wood, Timothy


Rost, Peter
Yeo, Tim


Rowe, Andrew
Young, Sir George (Acton)


Sackville, Hon Thomas



Sainsbury, Hon Timothy
Tellers for the Noes:


Sayeed, Jonathan
Mr. Michael Portillo and Mr. David Lightbown 


Shaw, Giles (Pudsey)



Shaw, Sir Michael (Scarb')

Question accordingly negatived.

Social Security

The Minister for Social Security and the Disabled (Mr. John Major): I beg to move,
That the draft Social Security Benefits Up-rating (No. 2) Order 1986, which was laid before this House on 1st December, be approved.

Mr. Deputy Speaker (Mr. Harold Walker): I remind the House that the Question on motions Nos. 2, 3, 4, 5, 6 and 7 and motion No. 8, the prayer on housing, if moved, will be put together at the conclusion of the debate. Therefore, it may be for the convenience of the House if the following motions are taken with motion No. 2:
That the draft Supplementary Benefit Up-rating (No. 2) Regulations 1986, which were laid before this House on 28th November, be approved.
That the draft Family Income Supplements (Computation) (No. 2) Regulations 1986, which were laid before this House on 24th November, be approved.
That the draft Statutory Sick Pay (Rate of Payment) Regulations 1986, which were laid before this House on 1st December, be approved.
That the draft Social Security (Contributions, Up-rating) (No. 2) Order 1986, which was laid before this House on 24th November, be approved.
That the draft Social Security (Treasury Supplement to and Allocation of Contributions) (Re-rating) Order 1986, which was laid before this House on 24th November, be approved.
That an Humble Address be presented to Her Majesty, praying that the Housing Benefits Amendment (No. 5) Regulations 1986 (S.I., 1986, No. 2183), dated 11th December 1986, a copy of which was laid before this House on 11th December, be annulled.

Mr. Major: The House will know that the Social Security Act 1986 and the Social Security Act 1975 require the draft uprating and contributions re-rating orders to be accompanied by a report from the Government Actuary on the effects of our proposals on the national insurance fund. That report has been laid today.
These statutory instruments, together with the regulations against which the prayer is made, put into force the proposed uprating of social security benefits announced by my right hon. Friend the Secretary of State in the House on 22 October. They will take effect from 6 April 1987 and will complete the process of transition to annual increases of benefit in April. In future, benefit changes will take place at the same time as other major financial changes, such as the changes in national insurance contribution rates also provided for here. I believe that this innovation will be generally welcomed. The instruments also provide for the changes in the statutory sick pay scheme which I announced on 6 November.
This is the first time—certainly in recent years—that it has been possible for the House to debate together both a benefit uprating and the changes in contributions which pay for more than half of all benefits. I hope that, if nothing else, debating these instruments together will remind those tempted to forget it that social security benefits, and their upratings, all have to be paid for by the country's working population. There is no fairy gold even for good causes. This uprating adds over £700 million, in addition to the £420 million extra provided in July, to the substantial sums already devoted to those who need support from our social security system. The total cost of the benefit system from the Consolidated Fund and the

national insurance fund together will amount to a staggering £46 billion in 1987–88. This represents over 30 per cent. of public expenditure and it is an excellent discipline to consider together both acquisition and expenditure of this enormous sum.
I should like to remind hon. Members briefly of the main features of the proposed upratings. Most benefits, including retirement pension, widows' benefit and unemployment benefit, will rise by 2·1 per cent. to reflect the increase in prices between January and September 1986, the relevant period for this uprating. This means, for example, that a married couple's retirement pension rises from £61·95 to £63·25 and that for a single person from £38·70 to £39·50. Housing benefit needs allowances will rise by the same cash amount as the relevant contributory benefit, thus minimising administrative difficulties for local authorities. This is particularly important at a time when they are preparing for the introduction of the reformed housing benefit scheme in April 1988. Supplementary benefit scale rates are to be increased by 2 per cent.—the amount of increase in the retail prices index minus housing—which, as the House will know, is the normal index used for this benefit. Child benefit and family income supplement will both be increased in line with inflation to sustain our support for families with children.
This will be the third increase in social security benefits within 16 months. The House last debated an uprating as recently as June. The increase this time, which because of the transition to an April uprating date covers eight months only, cannot be directly compared with upratings over the usual 12-month period, or with annual figures of inflation. A truer perspective perhaps is to point out that pensioners, for example, have received increases of £5·95 for a married couple and £3·70 for a single person since November 1985. These are substantial and welcome rises and no less valuable for having come in three tranches. I stress this point to forestall the predictable observations that may litter the speeches of those hon. Members who may care to join us in the debate later.
I stress also that the uprating is in line with the rise in prices as measured by the retail prices index, which, as the Retail Prices Index Advisory Committee continues to advise, is the best measurement available. The difference between these increases and the big cash increases given during the late 1970s is that inflation has now been dramatically reduced and smaller increases can now keep pace with the changing cost of living. Not only do benefits hold their value better between upratings but pensioners in particular will no longer see their savings destroyed by unrestrained inflation.
It is worth illustrating the relevance of that point. A pensioner who put his savings into a building society would have found that, between 1974 and 1979, their value had declined by as much as one third, even taking account of the interest received on the deposit. The same pensioner would find today that his savings are increasing in real value because of the reductions in inflation which have been achieved. This considerable achievement needs to be borne in mind when people sometimes criticise the levels of uprating, perhaps with something of a one-eyed stance.
The increases in this uprating are fully consistent with our undertaking to protect pensions and other long-term benefits against price rises. I make the point, too, because it is important, that over the past eight years there has been an increase of almost 1 million pensioners who deserve and


will have our support in their retirement. We are determined to continue to maintain the purchasing power of their retirement pension, and I am pleased to reiterate that pledge.
By the time the increases take effect, we will have completed the move to an April timetable for upratings. Beneficiaries have been protected against inflation at each stage of the transition and from next year will see, I think, the advantage of this more sensible timing of increases. Apart from getting higher benefits at the time when other financial changes take place, no longer will pensioners, widows and disabled people find their tax codes readjusted in the middle of the year following their pension increase. As all hon. Members will know, for many that has been a cause of frustration, which, happily will be removed. Moreover, because the uprating coincides with the general increases in rent and rates in April, local authorities will also find that they need to assess a claimant's right to benefit only once a year instead of twice as in the past, thus reducing the burden on them. This is a welcome improvement, too, for local authorities and those who seek rent and rate rebates.
The changes in the uprating timetable are further evidence of the determination that we have shown in a variety of ways to reduce the undesirable complexity of the present social security system. Changes resulting from the Social Security Act 1986 are an important part of this policy, and the Statutory Sick Pay (Rate of Payment) Regulations 1986 that are before the House today continue this move towards greater simplicity.
There are at present three separate rates of benefit under the statutory sick pay scheme, but 85 per cent. of spells of sickness qualify for the top rate. Every indication is that that percentage continues to rise. The remaining 15 per cent. have to be divided between two lower rates. We have decided therefore to merge the middle and lower rates to produce a simple two-band system. We believe that that more logically reflects the current position as well as reducing the burden on employers who administer the scheme. I hope that hon. Members will agree that administratively that is a sensible improvement.

Mr. Frank Field: I am sure that before the Minister finishes this part of his speech he will refer to the burden on claimants who will lose out. Has he had pressure from employers for this change, or has it been thought up by the Government?

Mr. Major: The hon. Gentleman will know that the Government are under repeated pressure from the large and small business lobby about the burdens on business. That is a matter of repeated pressure over the whole gamut of burdens that businesses feel have been placed on them by the Government. Undoubtedly within that the statutory sick pay scheme would have been one of the matters that employers had in mind.
The hon. Gentleman referred to the merging of the three rates and clearly has in mind the fact that the merging is effectively an abolition of the lower rate. He must bear in mind that the increase of the lower rate under the proposed abolition has a beneficial knock-through to statutory maternity pay. Many women will consider that a welcome change.
On the hon. Gentleman's specific point, those receiving the middle rate at the time of the change will, of course, be protected. I am grateful to the hon. Gentleman for

raising that point. In future we will increase statutory sick pay levels in the uprating order, although a separate instrument is necessary on this occasion precisely because of the reduction in the number of rates from three to two.
As well as increasing housing benefits needs allowances, the Housing Benefits Amendment (No. 5) Regulations 1986 also provide for an increase in the rent taper, by which benefit is reduced for those with incomes above the needs allowance level, from 29 per cent. to 33 per cent. Housing benefit now goes to one household in three in Britain, at an anticipated cost of some £5 billion this year. We have made it perfectly clear beyond doubt in the past that this level of spending, and the rate at which it is accelerating, is difficult to sustain. What we have sought to do by increasing the taper in this fashion is to restrain expenditure without causing hardship to those less well off who rely on housing benefit.
These changes will not, therefore, affect anyone who is on supplementary benefit or whose income is slightly above that level. Indeed, no pensioners with an income up to £10 above supplementary benefit level will lose benefit and the average loss for this group will be only about 47p. The expected saving from this change is about £28 million in a full year. In addition, the changed method of uprating the needs allowances, to which I referred earlier, means that spending will be some £40 million less than it would have been. Moreover, the Alice-in-Wonderland nature of this benefit is such that most people on housing benefit, including pensioners, will actually experience cash increases next April because rent and rate increases will trigger higher benefit payments.
In view of the demands for increased expenditure on benefits which I anticipate hearing about later from the hon. Member for Derby, South (Mrs. Beckett), I should like to remind the House of a point of principle upon which I touched earlier—that of the balance which must always be struck between providing for those who need our help and support—the elderly, the disabled, lower-income families with children—and the need to provide for a healthy economy which allows us to accept and meet those commitments. Our record shows that we have given serious attention to the needs of social security beneficiaries and have provided for substantial improvements to the system through which help is made available to them. At the same time, we have sought to ensure that a stable and expanding economy which benefits everyone, perhaps especially those beneficiaries, continues to be encouraged.
This brings me naturally to the second main element in these instruments—the means by which national insurance benefits such as pensions, unemployment benefit, invalidity benefit and others are actually financed. The Government's proposals for national insurance contributions were announced by my right hon. Friend the Secretary of State on 6 November. I hope that the House will acknowledge the Government's considerable achievement in keeping the rate of class 1 contributions unchanged for the fourth successive year. I cannot recall when that previously happened. As required by statute, the lower earnings limit for class 1 contributions will be £39 per week from next April. As the House will know, this is linked to the basic retirement pension rate rounded down to the nearest pound. The upper earnings limit, which may be between 6½ and 7½ times the basic retirement pension, will be £295 per week from next April, nearly 7½ times the basic pension level.
Right hon. and hon. Members may well have noted that the regulations bringing these proposals into effect have not yet been laid. The fact is that they cannot be until the draft benefits uprating order has been approved by Parliament because of the statutory link between the lower and upper earnings limits and the basic retirement pension. The regulations implementing the earnings limits will be laid as soon as Parliament has approved the benefits uprating order.
With reference to the instruments before us today, I want first to comment on the proposals contained in the draft Social Security (Contributions, Re-rating) (No. 2) Order 1986. The House will recall that in 1985, in order to help lower-paid workers and to reduce employment costs, we introduced graduated class 1 contribution rates, which came into effect in October 1985. The reduced contribution rates change significantly the impact of national insurance contributions on those receiving lower earnings, but did not in any way affect their benefit entitlement. The net annual cost of this change, reflected in lower receipts from national insurance contributions, is expected to be £500 million in the current year, which is its first full year of operation.
We propose to maintain the value of the earnings brackets at which lower contribution rates are paid by uprating their earnings limits. The lowest earnings bracket, on which contributions will be payable at the 5 per cent. rate, will run from £39—the new lower earnings limit—to £64·99 per week. The 7 per cent. bracket will run from £65 to £99·99 per week, and the 9 per cent. bracket will start from £100 per week and end at £149·99 per week for employers, and £295 per week for employees. Employers will pay contributions at the 10·45 per cent. rate where a person's earnings are at or above £150 per week. The proposed increases in the earnings brackets are greater than strict inflation indexing would have required.
Our proposals for class 1 contributions will thus further ease the contributions burden of some lower paid workers and their employers, where they are affected by the changed earnings brackets. Most other employed earners, and their employers, will be affected only slightly. People earning £295 per week or more will have to pay a maximum of 90p per week extra, if they are not contracted out from the state earnings-related pension scheme.
These perhaps are the proposals of most interest to most workers, but a growing number are self-employed and I wish to mention specifically our proposals for them. We attach great importance to the self-employed and their contribution to the economy. We welcome their growth in numbers and we are delighted that our steps to encourage this have been successful—particularly our earlier changes to their national insurance liability. The House will be aware that self-employed people pay their national insurance contributions in two parts—the flat rate class 2 contribution and the profits-related class 4 contributions. We do not propose to change the class 4 rate, which will remain at 6·3 per cent. from next April. The profits limits for class 4 contributions rise automatically each year broadly in line with the earnings limits for class 1 contributions. The annual profits limits proposed for 1987–88 are £4,590 and £15,340 respectively. The upper profits limit is exactly 52 times the proposed class 1 upper earnings limit.
We also propose to continue the abatement to the self-employed class 2 rate, which was introduced in 1985. Accordingly, we propose to increase the class 2 contribution rate by only 10p to £3·85 per week from next April. The small earnings exception from class 2 will also rise automatically by £50 to £2,125. The effects of our proposals are that class 2 contributors will pay £5·20 per year extra in 1987–88. For those self-employed people with profits at or above the proposed upper profits limit to £15,340, class 4 contributions will be £23·94 per year higher in 1987–88.
The proposed voluntary class 3 rate, which protects those who have breaks in their contributions record—for example, students or those who have worked abroad,—is being set at 10p less than the class 2 rate—that is, a rate of £3·75 per week from next April. The difference between the class 2 and class 3 rates, therefore, has been kept unchanged.
I mentioned earlier that national insurance contributions pay for only a proportion of benefits. The changing balance between the cost of contributory benefit and the cost of non-contributory and income-related benefit leads to the proposals in the Social Security (Treasury Supplement to and Allocation of Contributions) (Re-rating) Order, which is before the House. We propose to reduce the Treasury supplement to the national insurance fund by two percentage points to 7 per cent. from April 1987. Social security expenditure is financed by contributors, including employers, and by taxpayers who pay for non-contributory benefits, whether income related or not.
It is relevant that between 1981–82 and the current year, expenditure on contributory benefits as a share of total social security expenditure, has fallen from 60 per cent. to 54 per cent. for a variety of reasons. By contrast, the share of social security expenditure devoted to income-related benefits has increased from 19 per cent. to 26 per cent. over the same period. We have to strike a balance between revenue from taxation and contributions, and we decided that the taxpayer should pay less to the national insurance fund, in recognition specifically of the increasing costs of non-contributory benefit expenditure which are met wholly by taxpayers.
This draft order also increases the proportion of contributions which are allocated to meeting the costs of the National Health Service. Many people believe, mistakenly, that the whole cost of the NHS is met by contributions. That is far from true, but because of the great increases in expenditure on the NHS over recent years, we think it is right that those who pay national insurance contributions should meet a slightly higher percentage of the cost than at present. In 1987–88, expenditure on the NHS in Great Britain is planned to rise by no less than £1·1 billion to reach a total of £19·9 billion. So much for cuts, one might say, but I have no wish to be combative this evening. Our proposals for the employment protection allocation enable us to achieve a higher contribution allocation to the NHS to meet this extra cost without increasing overall contribution rates. Therefore, we propose to increase from April 1987 the employees' NHS allocation to 0·85 per cent. and the employers' NHS allocation to 0·7 per cent. of earnings, in respect of which class 1 contributions are paid. Corresponding changes in the NHS allocation are proposed for the other classes of contributions.
I wish to turn briefly to the employment protection allocation itself. The House will be aware that a small allocation is paid to the redundancy fund, and a still smaller allocation is paid, from employers' contributions only, to the maternity pay fund. Since August 1986 the redundancy rebate has ceased to be paid from the redundancy fund to employers with more than nine employees. The level of redundancy rebates had already fallen to levels lower than in the early 1980s. As a result, there are lower demands on the resources of the redundancy fund. In addition, the introduction of statutory maternity pay has led to the maternity pay fund being wound up from April 1987. We therefore propose to abolish the allocation of employers contributions to the maternity pay fund, and to cut the allocation that is paid to the redundancy fund.
As I mentioned earlier, a report by the Government Actuary on our proposals has been laid before the House. Total income received by the national insurance fund is estimated to be £26·3 billion in 1987–88 and total expenditure is estimated to be £25·6 billion, giving an expected surplus of £742 million for the year. At this stage, about four months before the start of the financial year and about 16 months before its end, it is difficult to be certain that the estimated surplus will be realised. The balance in the national insurance fund at the end of the next financial year is expected to be £6,359 million, equivalent to nearly 13½ weeks benefit expenditure. We regard this balance at this stage as a prudent objective which exceeds the Government Actuary's minimum working balance of one sixth of the year's estimated benefit expenditure.
In one way or another these orders will affect the lives of almost everyone and, although they are technical, they deserve serious attention. However, I want to make again the point that social security benefits must be met by tax and national insurance payers and cannot be paid for in magic gold. Their costs, and the costs of increases in them, always come out of the pockets of those in work, their employers and national insurance contribution payers. Many people are both beneficiaries and contributors. We believe that the instruments before the house tonight strike a fair and reasonable balance between protecting the beneficiaries against the rise in the cost of living and protecting the workers and employers who generate the resources needed, not only for contributions, but also for the tax revenue which finances the rest of the social security programme.
Therefore, I invite the House to endorse these motions and to reject the prayer in the name of the Opposition against the Housing Benefits Amendment (No. 5) Regulations.

Mrs. Margaret Beckett: Since this is the time when we are all urged to think of those less fortunate than ourselves, it is particularly appropriate that this is when we debate this year's package of what the Government decide can be spared for the poorest members of our community.
Three characteristics of the package, sadly, are shared with packages proposed in previous years. First, the package will ensure a continuation of the steady decline in the standard of living of those unable to work compared with those in work, as has happened every year since 1979. Secondly, the package is full of little titbits of ingenuity

—little changes here and there which all happen to produce savings for the Government. They produce a few tens of millions here and there by picking away, bit by bit, at incomes which are already too low. Thirdly, the package shows how shamelessly the Government shift their ground, denying now what they stalwartly affirmed a few months ago because any old justification will do and will be supported by Tory Members, so long as it saves public expenditure.
Two days ago the Government told us how worried they were about the low paid, but in these regulations 400,000 of the low paid will lose when the middle rate of statutory sick pay is abolished at a saving of £19 million. As the Minister said in a written answer in column 602 of Hansard on 6 November, it "overcomplicates the administration" of statutory sick pay to have the middle rate. We were surprised to hear that because last year when the Government decided to extend statutory sick pay to cover illnesses of 28 rather than eight weeks, the Minister assured us that the scheme was working superbly. He said:
There is growing evidence … that the scheme is working in general very well … there is substantial evidence that it is working satisfactorily."—[Official Report, Standing Committee E, 17 and 22 January 1985; c. 254–270.]
The Secretary of State gave similar assurances on the Floor of the House.
On 24 November 1986 I asked the Under-Secretary of State how many representations he had had about the administrative difficulties which have been given as a reason for the change that the Government are making this evening. He answered that there had been no complaints specifically about the structure of the re-rating, although some employers' representatives have mentioned them when pressing generally for a simplification of the scheme. Once simplification was mentioned the Government, always anxious to please, found a way not only of simplifying the scheme, but of saving money at the same time. That is what always seems to happen when the Government simplify matters.
An even more blatant piece of chicanery involves the housing benefit changes. Once again, the Government have increased the rate at which benefit is lost. As a result of that change alone, they have saved £28 million at the expense of nearly a million households—620,000 of them pensioner households, of whom 60,000 will lose all entitlement—and 120,000 of them families with children, of whom 20,000 will lose all entitlement to benefit.
In addition, the Government are saving £23 million on rents and £17 million on rates by increasing the housing benefit needs allowances by less than the rate of inflation and by using a formula which appears to break an undertaking given by the Minister. Again, it is simplicity that is called in aid.
At the last uprating, the Secretary of State announced that the needs allowance would be increased, not by the usual formula but by linking it to the then cash increase in pensions. It was pointed out that this would mean a smaller increase in the allowances but the Minister wrote to my hon. Friend the Member for Fulham (Mr. Raynsford) saying that the actual rate of increase would be taken into account at this uprating. Instead, once again, the link is with the cash increase in the pensions—which is not exactly generous at 80p for a single pensioner—and as a result of this change some 3·5 million households will be losers.
On 6 November I asked the Under-Secretary to estimate the loss of benefit for pensioner households, single person households, couples and couples with children. Although he told me that the reply would be made available as soon as possible, so far that has not proved to be the case. I should be grateful, if those figures are available, if he would give them to the House tonight. The total savings from the housing benefit package are some £68 million.

Mr. Jeremy Corbyn: Is my hon. Friend aware that there are many problems for households in receipt of housing benefits when the Department of Health and Social Security is inefficient in passing on the payments to the local authorities concerned? Tenants are often accused of being in rent arrears when that is not the case.

Mrs. Beckett: My hon. Friend is absolutely right. There are difficulties caused at both ends of the chain. In a case concerning a constituent of mine, the DHSS did notify the local authority of changes in the housing benefit allowances but no action was taken for some weeks. Arrears of some £90 built up through no fault of my constituent.
At the last uprating, housing benefit needs allowances were uprated, as I mentioned, in line with cash pension increases. The same principle was used for supplementary benefit increases. By that change the Government made a saving on supplementary benefit of £11 million in a full year. This time, again for simplicity and despite the contradiction of the Minister's statement, the same approach has been used as last year for housing benefit. The Government have also returned to the previous formula for supplementary benefit, which, surprise surprise, gives a lower increase than would have been paid if, again, housing benefit and supplementary benefit had been treated alike. When the Minister replies, perhaps he will tell us what the saving will be this time.
In our earlier debate this evening, a great deal was said about the Government's record on heating allowances. My hon. Friend the Member for Oldham, West (Mr. Meacher) quite properly pointed out that what pensioners might gain on the swings of heating allowances they have lost tenfold on the roundabouts of lower pensions.
In this year's uprating, heating allowances are not being touched because the Government say that fuel prices are stable. However, today's heating allowances reflect the fuel prices of May 1985 to January 1986—they are already nearly a year out of date. They will thus be payable at current levels until April 1988, by which time they will be over two years out of date. We seek an assurance from the Under-Secretary that if there is a substantial movement of fuel prices over that period—perhaps because the Government put a special tax on fuel, they have done it twice before—these allowances will be reviewed.
With regard to the general level of increases to be applied, we welcome, of course, the 15p increase in child benefit. That does not make good the cuts that the Government made in 1985, for which the increase would have to be 50p. Since it is generally accepted that child benefit is the best way of helping family poverty it is especially worrying that there are rumours of a further potential threat to the strength of this means of support.

It is because child benefit is a universal benefit that it is of such value. It is now suggested that, when the universal maternity grant is abolished, mothers will have to make a special application for child benefit.
I have written to the Minister to ask for an assurance that new ways will be found of issuing forms automatically, perhaps through the general practitioner or a hospital maternity unit. I would welcome that reassurance tonight. Child benefit is now worth £2·70 less for the second and subsequent children than the equivalent allowances were in 1955. That is a sad commentary on the current state of affairs, when some 4 million children now live in families in poverty.
Whatever the questions and criticisms we raise about the details of particular benefit increases, our major concern is that, once again, the standard of living of those dependent on pensions and benefits is falling compared to those in work. In his remarks, the Minister said—I do not recall the exact phrase—that the Government had given assurances that they would protect the value of pensions and that those assurances hve been maintained. That is not the assurance that the Government gave—it is an assurance which has been more convenient for the Government to make in recent years. The assurance given when the link between pensions and earnings was broken was that
pensioners and other long term beneficiaries can confidently look forward to sharing in the increased standards of living in the country as a whole".—[Official Report, 13 June 1979; Vol. 968, c. 439.]
That has not happened in any year since 1979. In this year alone the gap is widening by £1 for a single pensioner and £2 for a married couple. That is on top of the gap that has already been established.
In 1978 the pension was worth 20·4 per cent. of average male earnings. In 1986 it is estimated to have fallen to 18·4 per cent. In 1978 supplementary benefit for a couple with two children aged four and six was 45·9 per cent. of average net incomes. In 1986 it is estimated to be 43·1 per cent. This year alone, supplementary benefit would have to rise by over £2 for such a family to match the rise in earnings. If earnings continue to rise so much faster than prices, as they are doing this year, the basic state pension will steadily fall over the next 10 to 20 years until it falls to half of what it would be if it were linked to earnings. That is a steady and accelerating increase in pensioner poverty.
The Minister referred to the balance in the way in which money is raised for these benefits between taxes and through national insurance contributions. The Minister made an extraordinary point when he said that the level of contributory benefits paid for from the fund was falling as a proportion of those pensions and benefits raised. We do not disagree, as that is unquestionably accurate. However, as the level of contributory benefits is falling, the level of income to pay for those benefits raised from contributions rises. In other words, the benefits are being paid for, disproportionately, by contributors although their share of benefits is falling. How the Minister makes that a justification for the change the Government are making is frankly beyond me, as it seems to point in exactly the opposite direction.
The money that is raised to pay for pensions and benefits will continue to be raised, disproportionately, from the less well off. The Minister referred to beneficial changes made to national insurance contributions and we


do not dispute the figures he gave. Such contributions remain a heavier burden on the poor than the rich. The further reduction in the contribution to pensions and benefits made from general taxation, but cutting the Treasury supplements—now standing at 7 per cent. compared to the 18 per cent. at which it stood in 1979—means that in the future, as in the past, the cost of pensions and benefits will fall more and more heavily on the poor rather than on the rich.
Today, the Child Poverty Action Group published a document called "Christmas on the Breadline". It quotes the comments of those striving to give their children a decent Christmas on the inadequate level of benefits that these upratings perpetuate. It draws a contrast, among others, to the availability at Harrods of some rather bizarre items such as bridal outfits for one's dog at only £100 and a mere £20 for a track suit for a cat, with a quotation from a letter of a single mother who wrote to the Child Poverty Action Group following publicity in the Daily Star. It was one of many touching and alarming quotations but a simple one. It reads:
For us it is a worry just to pay for food and heating over the holidays.
There is no mention there of anything which makes Christmas special.
As unemployment continues to rise and as the standard of living of the unemployed, pensioners, the sick and the disabled continues to fall, as it will under these upratings, exhortations about the spirit of Christmas ring ever more hollow in our ears.

Sir Brandon Rhys Williams: The hon. Member for Derby, South (Mrs. Beckett) made a good point when she referred to Christmas. It is right that the House should bear in mind what my hon. Friend the Minister said when he opened the debate—many millions of people are affected by what the House is proposing to do by passing these orders.
This is not just a matter of benefits for a fringe element in the population—it affects many millions of people. At Christmas time I hope that we will remember that, because we have not yet got our system for the redistribution of income right, our society is divided into those in work and those in need. The very large number of people who, in one way or another, are dependent on means-tested benefits now constitute about one quarter of our population.
I hope that the remaining three quarters of the population who are able to enjoy their Christmas with the rising living standards of the nation as a whole will not be unmindful of the needs of the one quarter of the population whose income has to be supplemented by some means or another because their own resources are not enough.
It is right that the House should take some time to look at what is happening in these orders, not just because millions of people are affected but also because very large sums of money are involved. In general, I think that we can congratulate ourselves that we are living in a civilised society which provides a basic income guarantee.
Speaking broadly, we can say that nobody has to drop into total destitution in Britain today. I am one of the hon. Members who are old enough to remember what the distressed areas, as they were called in those days, were like before the war, because I was brought up in Glamorgan.

I remember very well the look of the streets, the look of the shops and the look of the people where there had been long-term unemployment and people were living on very small incomes with very little shred of hope that they would be able to get back into work and recreate the family circumstances which they had enjoyed at the height of the incomes that they earned when coal was at its best.
In Britain today we do not see the sort of harrowing scenes which were commonplace in large parts of the country before the war. So much has been achieved that we can be proud of and I am not entirely a critic of what the present Government are doing because I think the Minister is right to point out that we are raising benefits—national insurance benefits and supplementary benefits—at a rate which is faster than the rise in the cost of living. So, to some extent, we are taking with us the people in this unhappy subculture—people who are not able to rely on their own resources.
There is, as the Child Poverty Action Group has pointed out, a widening gap between those in work and those in need. I quote the figures that it has given to lion. Members in its briefing. I must say that I would like to pay tribute to the quality of the briefings that we get from the Child Poverty Action Group, which get better and better and are really quite important contributions to our thinking on these subjects. It points out that there is a widening gap for people on supplementary benefit, A couple with two young children in 1978 had 46 per cent. of the average wage. Now, in 1986, as it calculates, they get only 43 per cent. Matters are not improving where the building of one nation is concerned.
I have very often drawn attention to the fact that we are still in a muddle as to the reasons why we pay benefits to people whose income we wish to support. We have never clarified our thinking in this House on the grounds of entitlement and I think it really is worth going over this ground briefly again.
We have one system of universal benefits of which the principal example is child benefit—the only benefit of which is that there is virtually 100 per cent. take-up. Then we have the national insurance system which has slowly evolved during the 20th century and has many merits because people are able to draw their benefits without feeling that they are insulting their self-respect by doing so. National insurance provides pensions, unemployment benefit, invalidity and certain other benefits which people are not ashamed to draw. National insurance benefits, unfortunately, are not enough to cater for the needs of very many people and therefore we have to introduce a casework system based on proof of need—what we used to call the means test.

Mr. Corbyn: Does the hon. Gentleman agree that the growth in the number of supplementary benefit claims during the past 20 years is indicative of the absurdly low level of basic benefit entitlement and that the real problem is that poverty has increased despite there being a social security system because the benefit levels are inadequate to solve the problems of poverty?

Sir Brandon Rhys Williams: The hon. Gentleman has just drawn attention to a point that I was coming to and I think it shows that there is an identity of thinking among students of this subject on both sides of the House.

Mr. Major: I suspect that what the hon. Member for Islington, North (Mr. Corbyn) has in mind is an


interpretation of the low income figures which have featured from time to time during the past few months. Such is the weird manner in which those figures are constructed that, whenever the Government increase the real purchasing power of supplementary benefit, more people become entitled to it and the figures grow. It is an inaccurate and malicious interpretation of people who are in severe difficulty. I hope that my hon. Friend will not be tempted into agreeing with what I suspect underlay the hon. Gentleman's intervention.

Sir Brandon Rhys Williams: I may have misunderstood what the hon. Gentleman said, so it may be better to make my own points in my own way.
We have three grounds of entitlement—universal benefits, national insurance benefits and benefits based on casework and proof of need. In my view, the experiment with relying increasingly on casework in order to make certain that we do provide a basic income guarantee has failed. Selectivity has failed for many reasons and I should like to come to them briefly if time allows.
The big social developments, which are irreversible and which have taken place in the 20th century are the coming of universal suffrage, which means that we are no longer prepared to accept that our society is divided into two classes of people, and, of course, female emancipation.
I believe that, within the time span that we can contemplate, these major 20th-century changes are irreversible but we have not adapted our benefit systems to accord with those developments. We are still operating a redistribution of income in such a way that it does not take note of the fact that Britain has to be a united and equal society and it has to be a society in which women are treated on the same footing as men and are not left often in the condition in which they were in the middle ages.
Another reason why I am saying selectivity has failed is not only because it is out of tune with modern thinking, but because it is totally out of tune with the thinking of the Government. The Government quite rightly place emphasis on incentives to work and the value of thrift and the importance of saving and self-reliance. Well, we now have 14 million people in this country at any one time who are dependent on one form or other of means-tested

benefit. That is, of course, taking into account people who need to rely on housing income support. But even if we eliminated that number, we have got, I believe, about 8 million people who are reliant on supplementary benefit.
Those are people who know by instinct, even if they have not actually made the calculations, that there is not too much point in having savings because if one has savings, when one falls into need, one has to run them down before one is entitled to benefit; and there is not too much point in working because, for all too many of them, the sort of work which is available yields only about the same income after they have paid for their travelling expenses and their clothing and the rest as they can get if they remain out of work and simply rely on means-tested benefit.
We have about 14 million people on the large calculation and at least 8 million on the minor calculation, if we are dealing only with supplementary benefit. People who know that what the Government are preaching, and which it is right that the Government should preach, does not somehow apply to them. I urge my right hon. and hon. Friends who are responsible for the various aspects of the redistribution of income, please to think again before bringing to the House once more upratings of the existing system which do not introduce some completely new elements.
If time allows, Mr. Speaker, I am hoping to deal briefly with ways in which I recommend that we should reduce the numbers drastically of people who are reliant on supplementary benefit. It is not enough to aim to reduce the figures by—

Mr. Speaker: Order. Before I call the right hon. Member for Llanelli (Mr. Davies) to move the Adjournment motion, perhaps I should make it clear that the business postponed as a result of the debate under Standing Order No. 20 may be resumed and continued for a period equal to the amount of the time lost. That is, of course, if the House does not agree to the right hon. Gentleman's motion.

It being Seven o'clock, and leave having been given to move the Adjournment of the House under Standing Order No. 20 (Adjournment on specific and important matter that should have urgent consideration), further Proceeding stood postponed.

Airborne Early Warning System

7 pm

Mr. Denzil Davies: I beg to move, That this House do now adjourn.
Leave having been given this day under Standing Order No. 20 to discuss:
the need for an independent and urgent inquiry into the purchase of a new airborne early warning system for the Royal Air Force.
Several questions arise out of the statement of the Secretary of State for Defence. It was a long and detailed statement and I may come to it in my speech. However, I have no doubt that the Secretary of State for Defence or the Under-Secretary of State for Defence Procurement will attempt to deal with it in their respective speeches.
Most hon. Members including the Secretary of State would agree on at least one thing—that decisions on defence procurement are seldom easy. They are seldom easy, obviously, because there are so many considerations that must be taken into account. Those considerations often appear to be in conflict with each other. First, there are the military considerations, then the industrial considerations and then the financial consequences for public finance and public expenditure.
The industrial considerations cannot and should not be separated from the defence considerations. A country's ability to defend itself and, indeed, to wage war if necessary in its own defence, is invariably and obviously bound up with its defence industries and industrial base. A country that does not have a strong industrial and technological base cannot, in the modern world, wage war for very long. Recently there have been many examples of countries with strong industrial bases being able to wage war against seemingly larger and more powerful countries. We won the last war partly because of the strength at that time of our industry and, of course, of our technical expertise and innovation.
I agree with the Prime Minister that defence interests are paramount, but defence interests include military and industrial interests. It is no coincidence that President Eisenhower spoke of the military-industrial complex, because without an industry and without that base it would not be possible to provide the wherewithal to wage war and to defend one's country.
No other major nation in the West would have taken the decision that this Government have taken today. I do not believe that the French, the Germans, and certainly not the Americans, would have given the sort of kick in the teeth to their own industry which this Government have done. It is no good the Secretary of State or Conservative Members saying, "Well, it is all right, you know. There is a sub-contract here for Plessey and a bit there for Racal, and Ferranti comes in with another sub-contract." That does not show an understanding of modern defence procurement. Sub-contracts are all right but the main objective should be to secure the prime system and to ensure that one's industry can compete and carry out the prime system. If we merely produce components under sub-contracts, we shall lose the expertise to carry out the prime system which we need to maintain our base and to remain a viable industrial nation.
I said that these decisions are never easy. Perhaps I should have qualified that remark by saying that they are never easy if they are considered and looked at rationally

and objectively. They are, of course, much easier if the person who is taking them is driven by some sort of simple absolutism that is nurtured by half-baked economic theories, personal spleen and a besotted adoration, sometimes, of all things American.
The Government have not considered this problem objectively and rationally. The Secretary of State said in his statement that the decision was a matter of judgment. I am sorry to tell him that we do not have confidence in the Government's judgment on this matter or in their judgment on matters of defence procurement. That is why we say that there should be a second opinion on, and an independent inquiry into, the technical matters involved.

Mr. Robert Atkins: I am exceedingly grateful to the right hon. Gentleman for giving way. Will he comment on remarks attributed to the chief Royal Air Force officer responsible for this project, who was reported in The Times on Monday as saying, with the blessing of the Chief of the Air Staff:
I simply cannot accept these allegations
that there had been some sort of bias in the evaluation.
There has been the most thorough, far-reaching evaluation of the competing proposals … over the last six months.
The suggestion that the assessment is a biased RAF exercise impugns the integrity not only of the RAF but also of all those individuals involved in this difficult task.
Does the right hon. Gentleman accept that?

Mr. Davies: The gentleman concerned is perfectly entitled to express his view. During the past two or three weeks many things have been said in the newpapers on this matter. However, we do not trust the Government's judgment on defence procurement, or on the question of protecting British industry and British technology in general, because their record is not good. It is unnecessary to have a long memory—

Mr. Gerald Howarth: The right hon. Gentleman suggests that the judgment of the Labour party might be better than the judgment of the Conservative party. If the Labour Government's judgment was so wonderful why was the TSR2 cancelled in favour of the F111, which was then also cancelled? Perhaps he will tell the House about their surfeit of judgment in that regard.

Mr. Davies: We did not order a foreign aircraft.
Let us look briefly at the Government's record on procurement during the past three or four years. It is not necessary to have a long memory to remember what happened the last time the Government became involved in defence procurement. About a year ago there was lie question of the purchase of Westland or of a share in it. Perhaps I should remind Conservative Members what happened—[Interruption.] We are discussing an important matter of procurement. I am trying to show that the Government's judgment is not particularly good on these matters. What happened? Two Secretaries of State resigned. The Prime Minister was so determined that shareholder power should overrule the national interest and that the Americans should control Westland that she was prepared to subvert many of the conventions of the constitution to get her way. She got herself into such a pickle that she had to call upon Sir Robert Armstrong—that well known linguistic gymnast—to rescue her from her difficulties.

Mr. Robert Atkins: That has nothing to do with it.

Mr. Davies: The Secretary of State said that it was a matter of judgment, and I am trying to show that the Government's judgment in these matters has not been very good. Let us see how good the Government's judgment has been in respect of defence procurement and the royal ordnance factories. We all know what has happened to them during the past year. Let us see what has happened to the royal dockyards following the hare-brained scheme proposed by the former Secretary of State for Defence, the right hon. Member for Henley (Mr. Heseltine). They are being decimated and destroyed by the Government's procurement policy.
Let us look at the general policy of competition within the Department. If the Government continue with some of their competition policies, our defence industrial base will soon go the same way as our civilian manufacturing base has gone. If Conservative Members do not realise that, they should start to think about it. To some extent, our defence industries have always been protected. They have been protected by Governments of both parties in two ways. First, they have been protected by a virtual block on imports, with certain exceptions. That was one form of protection, although it was not an exact import control. Secondly, our defence industries have been protected to some extent over price in order to enable them to carry on. However, the Government are taking that protection away, and opening the industry up to competition from other countries that would never allow us to compete in the way that they compete here. That is what is happening, and if it continues there will be a substantial diminution in our defence industrial base.

Sir Antony Buck: If what the right hon. Gentleman has just said is true, is it not remarkable that we have managed to export 113 Harriers to the United States?

Mr. Davies: There is obviously a two-way trade, but the danger is that our defence industrial base will be destroyed as a result of the Government's policies.
Let us briefly look at the record on the civilian manufacturing side. Not long ago, the Prime Minister wanted to sell off our last remaining motor manufacturer to the Americans as well as Land-Rover, but she was stopped by opposition from Labour Members and by many other hon. Members. Again, that shows that the Government do not have a very good record on judgment in these matters.

Mr. Michael Heseltine: How does the right hon. Gentleman square his suggestion that we do not support Britain's defence industrial base with the fact that 95 per cent. of procurement is bought through British industry or collaborative projects?

Mr. Davies: That used to be the case, but there is a great danger that that percentage will reduce rapidly as a result of the Secretary of State's policies. Given the mess that the right hon. Member for Henley made of the royal dockyards and the royal ordnance factories, he should be the last person to stand up and say anything.
As the Secretary of State said in his statement, the latest instalment in the long Nimrod saga commenced in March 1986, when the Ministry of Defence announced an open competition for an early warning system for the RAF. As the House well knows, three American companies — Boeing, Lockheed and Grumman — entered the

competition, as did GEC. After the preliminary examinations, Lockheed and Grumman dropped out because I understand that their systems were not considered suitable. Thus, the two companies left, GEC and Boeing, were presumably thought to be suitable to go into the final round of the competition.
I think it is fair to say that the competition at least spurred GEC into action. I understand that during the next few months several improvements were made to its system. The transmitter was improved, as was the range and the overland capability. The receiver capacity was enhanced to prevent overloading, the tracking programme was improved, and the central computer was made to work three times as fast. No doubt there were other improvements as well, which were carried out in the fairly short period between March and the competition's final stages.
Indeed, the position had improved sufficiently for the editor of Flight International—a respectable publication that is well thought of—to write towards the end of the year:
The Royal Air Force choice must be for quality. It is becoming evident that the GEC equipment is performing almost impeccably, and is at least equal to the Westinghouse equivalent in the E-3A, if not some years in advance of it.
Confidence in the system was enhanced when Lockheed decided that it would insert the system into its aircraft in order to try to sell the system worldwide. Again, I should have thought that Lockheed would not have done that unless it was satisfied that the system worked. We are talking about an American company that is a very close competitor of Boeing. Hon. Members may say that that is not enough for them, and that they are not prepared to take Lockheed's view, the view expressed by the editor of Flight International, and so on. In that case, perhaps they will take it from the horse's mouth, from the Secretary of State for Defence.

Mr. Robert Atkins: What about Jane's "All the World's Aircraft"?

Mr. Doug Hoyle: Shut up and listen. You might learn something.

Mr. Speaker: Order. This debate is of great interest and I ask the House to listen quietly to what the Opposition spokesman has to say.

Mr. Davies: On 5 December, two weeks ago, the Secretary of State made a clear statement. He has been challenged about it in the House and he has not denied it, and so I shall repeat it tonight. Quite gratuitously, when asked, he said that "both systems work." He need not have said anything. He did not even qualify that. He went on to qualify the position in terms of cost, but there was no qualification of technical matters. He did not say that in one of those fireside chats that he gives on Radio Ayr, such as the one that he gave before the bombing of Libya. This was prime time stuff, on "News At Ten". He clearly said that the two systems work. I am not sure what the Secretary of State said this afternoon. I think that he said that they did not work. By implication, his statement shows that the two systems—[HON. MEMBERS: "No!"] The Secretary of State is perfectly capable of answering for himself. I can only repeat what he said.

Mr. Jonathan Sayeed: Does not my right hon. Friend's earlier statement show that he was bending over backwards to be fair to GEC? Surely the purpose of


airborne early warning is to give a better warning than ground radar pictures can do. As the GEC Nimrod gave a worse picture, would it not be better to buy an aircraft that gives a better picture?

Mr. Davies: All I know is that on 5 December, the Secretary of State bent one way, and today he has bent another. Perhaps he will tell us how he squares that statement with what has been said today. Within 48 hours of the Secretary of State's statement on television, there was a barrage of propaganda in the press rubbishing GEC and Nimrod. The two stories from the Sunday newspapers that I shall quote were probably written within 24 hours. I shall quote stories from The Observer and The Sunday Times of 7 December, stories written on Saturday afternoon. The story in The Observer was written by Adam Raphael and Victor Smart. It said, under the headline:
Cabinet gets set to ditch Nimrod.
The Cabinet's defence committee is expected to decide this week between the rival bids … But with Mrs. Thatcher firmly in the Boeing camp
the Government are likely to go for the AWACS system. James Adams, the defence correspondence of The Sunday Times said:
The project is three years late, more than £600 million has been spent … George Younger, the defence secretary, received the report from the equipment policy committee on Friday and is studying it over the weekend.
He had not studied it on the Friday, when he went on television.
We need to be told how the Secretary of State squares his statement that both systems work with the leaks that came from his Department. They could not have come from anywhere else, and there is a quotation from somebody in his Department who is not named. Was the Department trying to get at the right hon. Gentleman? Was it trying to change his mind? Was it a coincidence or a consequence? It is no good the Secretary of State smiling about it—he owes the House an explanation of what went on, especially when the conclusions of committees that are supposed to be secret are found in all the newspapers on the following Sunday. Has he lost control of his Department or is he still in control?
AWACS is not perfect either, and the Secretary of State knows that. It took 16 years to develop and its technology is quite old. As Boeing confirmed, it has had to be substantially updated over the years and those updatings are not done by Boeing for nothing—it charges the United States military. Many would say that AWACS was not designed to work in Europe.
There is then the question of jobs. The Government, and in particular the Secretary of State in his statement today, have tried to say that more jobs would be created. We know that jobs will be lost. We do not know how many—perhaps 2,000 or 2,500. In his statement, the Secretary of State said that Boeing had entered into a contractual obligation to provide £130 worth of work for every £100 of work on the AWACS. When I asked the Secretary of State whether any penalties would be applied if Boeing failed to carry out this obligation, he said that they would not. It is a strange contractual obligation where if one person breaks the contract there are no sanctions.
We know what it is in the contract. Boeing says that it will use its best endeavours to find the jobs and do the offset. The Secretary of State cannot tell me that, if Boeing fails to provide that £130 worth of jobs, there is a procedure for suing the company or getting damages. We

have seen this arrangement time and again, as in the case of Trident when few jobs and orders came. We also saw it in the case of star wars. The right hon. Member for Henley rushed off to the Pentagon and signed an agreement to provide £1 billion, but look what has happened. Time and again, when we enter offset agreements with the United States, a mere trickle of jobs results, for the simple reason that the Americans are not as daft and soft as we are and they keep their defence contracting, in the main, to themselves. Perhaps the Secretary of State will confirm that there is no way that he can make Boeing live up to its promise of £130 worth of jobs for every £100 of work.
The Secretary of State said that the money that would be lost as a result of this exercise was about £600 million, and that the cost of AWACS would be £860 million for six. He went on to say that there was an option within six months to acquire another two. Would he explain that option a little more? Do we need six or eight aircraft? Presumably the Secretary of State knows how many we need—or does he need another six months? We should be told how many we need because no doubt the threat has been assessed, and I would have thought that the military conclusion would tell the Secretary of State how many he needs. If he orders another two within six months, how much more will that cost?
The Secretary of State then said that the £860 million was at 1986–87 prices. Perhaps I am being obtuse, but is that the fixed price? I take it that it is the fixed price, irrespective of what happens to inflation, but we should be told whether that is the actual sum in sterling that the British Government will have to pay. We were then told that the money would be found within public expenditure totals. By when does the money have to be found? The public expenditure totals do not go for more than three years, as there is now a three-year public expenditure review. Will the money be found within those three years or will it be paid in 1991, when the Boeing aircraft are delivered? We should be told what the implications for expenditure are, and we should be told whether the Government intend to lease three aircraft between now and 1991. The Secretary of State said that no offer had been made, and he was choosing his words carefully. Perhaps no formal offer has come, but have negotiations been started? Would the aircraft come from Boeing or the US Air Force, and how much would they cost the British taxpayer?
The Government's judgment on this matter is suspect, and the Secretary of State has said that he cannot prove anything and that it is a matter of judgment. In view of that, of the considerable consequences of the Government's decision for Britain's defence interests, British industry, for jobs and the economy, the history of the matter and the statements that have been made, the prudent course is to seek a second opinion by setting up an independent technical inquiry. It need not take too long. It should not take very long. There is no great rush as the contract does not have to be signed immediately.

Mr. Robert Key: Will the right hon. Gentleman give way?

Mr. Davies: No, I have taken enough time.
The aircraft will not be with us until 1991, so it will be possible for the Government to satisfy everybody,


including industry, by setting up an independent inquiry to look at the technical matters once and for all. We would all accept the results of such an inquiry.
If the Government do not do this, we must conclude that it is not just scientific and engineering matters that have been decided in this case, but that there is an element of malice towards GEC and perhaps towards some of its leading personnel. If the Government fail to set up an inquiry, we must also conclude that what they have done and what they will do by deciding in this way shows their contempt for British industry, defence interests and technology.

The Secretary of State for Defence (Mr. George Younger): I am very grateful to the right hon. Member for Llanelli (Mr. Davies) for providing us with the opportunity to have a debate so soon after the difficult decision that I had to announce this afternoon. However, with best of goodwill towards the right hon. Gentleman, the kindest description I can give of his speech is that it was a bit of a struggle. I thought that we were going to hear a clear and specific definition of the Opposition's views on the Nimrod decision, what they would have done themselves, and why. Instead, we were given a long tour d'horizon of the right hon. Gentleman's ideas on defence policy generally.
I have to offer my apologies to the right hon. Gentleman. It was somewhat tactless of me to have answered in my statement this afternoon all the questions that he was going to ask. I appreciate that it was difficult for him to recast his speech, so I was interested in some of the thinking on his feet in which the right hon. Gentleman indulged. It showed that he has a flexible attitude towards dealing with policies, if they can be made up as he talks.
He announced that in the past there was a virtual blockage of imports of defence products. If the right hon. Member for Leeds, East (Mr. Healey) had been here to hear his vast purchases of equipment from other countries, particularly from the United States during his time as a Defence Minister, described as a virtual blockage of imports, I think that he would have derived some wry amusement from it.

Mr. Neil Kinnock: It is plain that the Secretary of State is not very good on percentages. Is 5 per cent. a large amount or a small amount? Will he also give us the answer that he did not give this afternoon? What is the enforceable power in respect of the alleged 130 per cent. contract that he is supposed to be setting up with Boeing?

Mr. Younger: I understand why the Leader of the Opposition feels the need to try to make the speech of his right hon. Friend the Member for Llanelli again. On the 90 or 95 per cent. figure, or whatever it is, the correct figure is over 90 per cent. But that was not my point. It was the point of the right hon. Member for Llanelli. The right hon. Gentleman cannot get away from the fact that he said that there was a virtual blockage of imports, but he moved his stance when he saw he was getting nowhere. A few bars later, if that is the right way to describe it, he said, "No, no, there is a two-way trade between the two sides of the Atlantic. We are buying and selling both ways." He was moving his stance as he went along.
Then he came to his great panacea for our defence industries and exports. [Interruption.] I am trying to inform the House of the views on the Labour side, which I am sure the right hon. Member for Llanelli will be most entertained to hear. This great leader on the other side, who is so keen on defence exports and defence industries, has committed himself in a paper, which I read with great interest, which was produced by the national executive committee of the Labour party. It says:
There are strong arguments for a policy against the arms trade. Far too many jobs are dependent on other people's wars. There are also strong, less widely publicised economic arguments. We"—
that is a Labour Government, if ever there should be another one—
will disband the defence export services organisation.
It is very nice to know that the Labour party has such a high regard for this organisation. I should point out that it is not the sales organisation that it intends to disband, but the defence export services organisation. Those who buy defence equipment, and, by doing so, create jobs in this country, will find that a Labour Government, should there ever again be one, will disband that organisation.
The right hon. Gentleman asked a number of questions which I shall do my best to answer, although I think that I have answered all of them already. First, he asked whether we need six or eight E3A aircraft. To fulfil the full and necessary policy that we want and that NATO wants us to provide, we need eight. In my statement I committed this country to buying six now and I have taken an option, with Boeing, to buy two more within six months at the same price. I wish to keep those two in reserve until I know the outcome of the annual review of our long-term costings. It is most important to see everything in the round so that we can make sensible decisions.
I said this afternoon that the price that had been offered by Boeing had been quoted in sterling. It is a fixed price that contains an allowance for inflation. There will only be an addition for excess costs and inflation if a point above a certain threshold is reached. The rest of the information is confidential, but that is the general line and it is a very full answer to the right hon. Gentleman's question.

Mr. Denzil Davies: The right hon. Gentleman did not say this afternoon that there would be an allowance for inflation. Is that British inflation or American inflation? How is it to be calculated in the contract?

Mr. Younger: The details are part of the contract. The right hon. Gentleman knows that we do not make details of that sort public, for obvious reasons. [HON. MEMBERS: "Why not?"] Nor did any of my predecessors in this job.
The right hon. Gentleman also asked where the money would come from. I made it clear this afternoon that the money will come from within the Ministry of Defence's expenditure patterns which have already been published—[Interruption.] The right hon. Gentleman would hear a great deal better if he did not talk so much himself. The money has to be found from within the Ministry of Defence's expenditure patterns which have been published by my right hon. Friend the Chancellor of the Exchequer. There is no mystery about that.
Lastly, the right hon. Gentleman asked whether any offer on leasing had been made. I made it clear this afternoon that there has been no offer, but that if there


were such an offer I should consider it, if it were necessary to do so. I repeat that I have not had an offer, but if I receive one I shall consider it carefully.

Mr. Denzil Davies: I asked the right hon. Gentleman when the expenditure would start and when the payments would be made. Will there be payments within the next three years? The public expenditure assessment is for the next three years.

Mr. Younger: That is a perfectly good point. There will be some expenditure in the next three years, but there will be savings in the earlier years, because of the expenditure profile. I have given the totals, but the right hon. Gentleman will have to wait until he sees the breakdown and what, exactly, the cost works out at.

Mr. John Wilkinson: Will my right hon. Friend clarify the options? Is the issue of whether the option is to be taken up at a later date in any sense contingent upon a potential order by the French air force? Will Royal Air Force aeroplanes have the CFM56 engine—the Franco-American engine—which is certificated for the Saudi Arabian air force?

Mr. Younger: The option is not dependent upon the French taking up an order for AWACS, but I have made it clear that if the French decide to take AWACS, which is not at all unlikely, we shall be willing to co-operate with them over the procurement of AWACS and the support facilities for it. That has been very much welcomed by the French Government.

Mr. Frank Cook: Will the right hon. Gentleman give way?

Mr. Younger: No, not for the moment.
As for the rest of the option—[Interruption.] I am trying to answer the first part of the question, but the right hon. Member for Llanelli is much more interested in asking the questions than in hearing the answers. However, that is understandable. [Interruption.] The right hon. Gentleman is more interested in asking questions than in getting answers. My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) asked a valid question about the option. It will be exercised entirely at our discretion. If the French buy some AWACS aircraft, it will be a matter for negotiation between us and Boeing about whether that makes a difference. The engine laid on by Boeing is exactly the same as the engine in the existing AWACS aircraft.

Mr. Frank Cook: The French are interested in an airborne early warning system and have already expressed an intense interest in Nimrod. If they pursue that interest and intend to purchase the whole system lock, stock and barrel from GEC Avionics, what will be the Government's attitude? Would they permit such a purchase or would they try to block it?

Mr. Younger: I am always keen to encourage defence exports and should be very pleased if the French want to buy Nimrod. That is an excellent idea. The right hon. Member for Llanelli was somewhat unwise to pour cold water on the value of the offset deals. Whatever else one says about Boeing, it has an extremely good record in delivering what it promises on offset. When we bought Chinook helicopters from Boeing, the company more than fulfilled its undertaking on the offset. What is more, as has been made clear not only by me but by some of the

contractors concerned, the offset being offered in this deal is good and of a high quality. If the right hon. Gentleman does not believe that, he should speak to the firms concerned and they will tell him that that is the case.

Mr. Denzil Davies: In his statement the right hon. Gentleman said that there was a contractual obligation. I asked if there were any penalties and he said no, but if Boeing fails to exercise its best efforts the Government have no sanction in law against Boeing. Is that the case?

Mr. Younger: I have already answered that question but I shall answer it again. In the case of the contract to supply the aircraft there are penalty clauses on Boeing if it fails to deliver on time and so on. There are no penalty clauses about the offset but Boeing has an exceptionally good record—[Interruption.] Apart from the fertile imagination of the right hon. Gentleman, there is no reason to think that Boeing will not fulfil its obligations. It will probably exceed them.

Mr. Churchill: Does my right hon. Friend agree that it comes ill from the Leader of the Opposition to impugn the good faith of our American allies on whom he intends to rely for the ultimate nuclear defence of our nation? Is it not rather cheap for the right hon. Member for Llanelli (Mr. Davies), who has no great technical knowledge and expertise, to impugn the integrity and judgment of the scientific and service expert advice tendered to my right hon. Friend?

Mr. Younger: My hon. Friend is correct. However, he is expecting a great deal too much if he expects logic from the Opposition. I urge him to be a little more realistic in what he expects from the Opposition. One cannot expect the right hon. Member for Llanelli to be logical because he made a long speech about how good our defence industry and exports are and yet proposes to abolish the whole organisation if the Labour party come to power.
My statement was rather long and I shall not weary the House by repeating all the points that I have already made, although I seem to have had to do so for the right hon. Member for Llanelli. In the short time available to me I should like to concentrate on the most difficult and controversial issue arising from my decision—my assessment of GEC's prospects of achieving the required performance with the Nimrod system. That is probably what the House will find most useful to hear.
Airborne early warning is a fundamental requirement of modern warfare and our lack of this capability, for instance during the Falklands conflict, had consequences which we all clearly saw. In layman's language, the purpose of AEW is to put radar into the sky so that it can look far beyond the horizon of any radar system on the ground. This should give a clear picture of all flying objects over a long range, including those at low altitudes at which a hostile aircraft could conceal itself beyond the earth's curvature.
The AEW first detects hostile aircraft and then tracks their movement and, if possible, identifies their type. Friendly forces can then be alerted and fighters scrambled to intercept the intruder. The AEW aircraft will then guide them to the target. The AEW ensures that our fighters and aircrew do not wear themselves out on speculative patrols, but are called up when needed and directed straight to their targets. In this way the effectiveness of our fighter force is greatly enhanced. In other words, AEW is a force multipler in the truest sense.

Mr. Tam Dalyell: The Secretary of State for Defence stressed the importance of a vital secure data link. Does he agree with the chairman of GEC who said in a broadcast at 5 pm that in three years' time Nimrod will be much better? In the view of the right hon. Gentleman's ministerial experts would GEC have solved the problem of the secure data link within three years? That is a purely factual question but it is important in terms of judgment.

Mr. Younger: The unanimous view of the experts was that with the best will in the world—it is only their judgment—GEC would not have been able to solve all the problems in that time.

Mr. Dalyell: The data link problem?

Mr. Younger: Yes, especially the data link problem, and that problem is also experienced in the AWACS. It is not a matter of dispute between the two companies.

Mr. Dalyell: So Boeing is not better than GEC. On the data link problem, are we being told that Boeing has no great advantage over GEC? These are difficult systems. Is Boeing not much better than GEC?

Mr. Younger: I have made it clear that there is nothing between the two on that point. All hon. Members should know that, but if they do not I make it clear now that those items are still—

Mr. Dalyell: That alters it.

Mr. Younger: This is nothing new and it is perfectly well known by everybody concerned that the data link is still in the development phase. It is not a problem—

Mr. Dalyell: It is the reason given in the right hon. Gentleman's statement. Look at paragraph 5.

Mr. Younger: I know exactly what is in the statement. With respect, the hon. Gentleman has a great talent for making something out of nothing. I was quite open about it and I still say that on that aspect there is no difference between the two. I looked carefully at my statement and if the hon. Gentleman reads the text he will find that that is borne out word for word. This is a short debate and I do not want to take up time by going into a non issue.

Mr. Dalyell: On a Point of order, Mr. Speaker. I am told that I have a talent for making something out of nothing. For 20 years I have been the weekly columnist of the New Scientist and I know something about the subject.

Mr. Younger: I hope that the hon. Gentleman will not be too sensitive. I am not trying to be disrespectful to him but, as I have said, this is a short debate and many hon. Members wish to speak.

Mr. Dalyell: The right hon. Gentleman has been technically caught out.

Mr. Younger: This early warning system is the essential and demanding role for which Nimrod has been planned for nearly a decade. The recent flight trials were carried out with great care. I flew in one of the sorties, as did my hon. Friend the Minister of State for Defence Procurement. As a result of the trials we have been able to form a clear picture of Nimrod's performance against the air staff requirement.
It must be emphasised that we did not conduct a sudden death play-off between Nimrod and the E3A, as has been

represented. Nimrod was tested against the air staff requirement. Neither did we move the goal posts, although perhaps we would have been justified in doing so in view of the increase in the air threat since 1977. We did not specify, as has been suggested, that the AEW system must track aircraft targets over densely populated land. We said that this would be a valuable bonus in the competition, but it was never part of the baseline specifications against which Nimrod and AWACS were measured. I make that clear again.

Mr. George Park: Is the Minister asserting that the specifications were never altered during the life of this contract and that GEC never got altered specifications or amendments during the whole life of the contract? Is that what the Minister is saying, because if so it runs entirely contrary to the evidence that was given to the Public Accounts Committee?

Mr. Younger: The hon. Gentleman must understand that they are two different things. I have never heard of a contract that has gone through without the specifications being altered many times and on many points. Air staff requirement 400, against which this project is measured, has not been altered except in one respect, in that in-flight refuelling was added to it with the agreement of everybody. There is no problem about that because both of the contenders have in-flight refuelling capabilities.
This is a very short debate and I should conclude my speech as soon as possible because many people wish to speak.

Dr. Keith Hampson: rose—

Mr. Tony Favell: rose—

Mr. Younger: It is most unfair on other people.

Mr. Favell: I am grateful to my right hon. Friend. As he is aware, many of my constituents are employed at British Aerospace at Woodford. Will he please assure them and the whole of the north-west that there is no criticism of the way in which they have carried out their work on the 11 airframes? What will happen to the 11 aircraft which have been constructed by British Aerospace?

Mr. Younger: My hon. Friend has made a valid point. I should like to take the opportunity of saying again, as I said in my statement, that British Aerospace carried out its part in the contract excellently and completely to the stage that it had reached. It has done a good job in providing the aircraft and I should like to make that clear.
We shall have to give urgent consideration to the future use of those aircraft. I have begun to identify a number of possible uses for them. Nothing definite has yet been put forward, but, naturally, this is an important matter. The future of that airfield will, of course, also have to be considered. I accept my hon. Friend's great concern about that matter and I assure him that it will be addressed as soon as possible.
The air staff requirement specifies a number of performance characteristics that must be achieved, of which two are of fundamental importance. The first is the detection range which must be long enough to give the fighters time to scramble and intercept. The second is continuity of tracking. That is to say, the signature of the target aircraft must remain in and be displayed by the AEW computer system for as long as the aircraft remains within range. If the life of the track is too short, the signal


may disappear and then reappear apparently as a new signal, thus giving the false impression that there are two aircraft instead of one and confusing not only the operators in the AEW aircraft, but users of the information in the air, on the ground or at sea.
We had hoped that our experts' appraisal of Nimrod and the programme of flight trials would ideally demonstrate that the system was within sight of achieving the required standard, or failing that, that there was at least a good prospect that it would achieve it within an acceptable time scale. Regrettably, my experts were unable to reach that conclusion. The flight trials yielded no consistent or reliable pattern or results. Those results, which GEC was content for us to use, generally showed a detection range significantly below what we had specified. The mean track life of the system was less than half of what we specified.
That is the performance of the system today, which the company would accept falls well below our standards now. However, the company has proposed technical solutions to overcome those various shortcomings. Taking each shortcoming and each proposed solution in isolation, it is possible that the system might approach the required standard, but even so, its performance would be marginal and on GEC's own showing the system would have only 70 per cent. of the reliability that we have specified.
My experts had to judge the system as a whole and not each of its component parts separately. All the individual improvements would have to be integrated into a system which would perform well in all respects. Sadly, our experience in recent months has been that as the firm has made an improvement in one area, that has resulted in the degradation of some other aspect of performance. The experts judged that that pattern was likely to continue and that the required performance was unlikely to be achieved before the mid-1990s at the earliest, if then.

Mr. Cranley Onslow: Is the ceiling of the aircraft relevant to the detection range? In that context, is it important that the Nimrod can attain a ceiling of about 25,000 feet and that the AWACS can attain a ceiling about 10,000 feet higher?

Mr. Younger: My hon. Friend has made a good technical point. The range at which each aircraft is effective is affected by its height because it can see that much further, the higher it can get. However, I stress that all the testing that we have done of the ability of Nimrod to operate is against ASR 400 and not against the AWACS aircraft.

Mr. Kinnock: On the basis of the appraisal that the Secretary of State has rightly offered us as a matter of public record tonight, if Lockheed were to approach him what advice would he offer it about the installation of the GEC system for its aircraft? If the French were to approach him on the subject, what advice would he tender to them about that British product?

Mr. Younger: I am not quite sure what the right hon. Gentleman means by the word "advice".

Mr. Dalyell: That is a very good question and the Secretary of State should answer it.

Mr. Younger: I am endeavouring to do just that. I and not quite sure what the right hon. Gentleman means by the word "advice".

Mr. Kinnock: The right hon. Gentleman is rubbishing British products.

Mr. Younger: I am trying to be open with the House about the sort of considerations that led me to take a very difficult decision. If the right hon. Gentleman is asking me to say nothing about that, I am very surprised. I have made it clear all along, and particularly this afternoon, that I regard GEC as a good company doing much very good work for the Ministry of Defence. I expect it to continue to do that for a long time in the future.
It is a great mistake and a damaging error to make out that because this contract ran into difficulties, anything else that GEC does is also inefficient. That is not the case. The company is a valued contractor and I wish it to remain so.
It is easy for hon. Members to criticise the judgment that we have made, but it is much more difficult to be the person who makes it. The one thing which, sadly, was missing from the speech of the right hon. Member for Llanelli was a balance between the considerations that he would have had to take if he had been in my position. He rightly emphasised the effect of a decision of this sort on the industry concerned, the company concerned and the reputation of British industry. That has been very much in my mind when making this difficult decision.
However, the right hon. Gentleman made no mention of the other criteria—the equipment and the standard of the equipment that the RAF requires to do its job. With respect to the right hon. Gentleman it is no good taking one of the criteria and letting it drive the whole thing because the whole is a balance between the various criteria that have to be taken into account. If I take the right hon. Gentleman's argument at its most literal, he is saying that the overwhelming importance of British industry having the work must take complete precedence over whether, at the end of the day, the equipment has worked.

Mr. Hugh Dykes: The difficulty of my right hon. Friend's decision is appreciated by everybody and there is great sympathy for it. The great tragedy of the post-war period is that again and again we surrender to American technology. That weakens the country and the whole of Europe because we do not develop our own high technology.

Mr. Younger: I thank my hon. Friend for his absolutely valid point with which I totally agree. However, one cannot understand from that that we are in a position to do everything ourselves. It is better to collaborate on some things. To be fair to the Americans, they have taken the same view in reverse and have not attempted, because they could not beat it, to make a competitor to the Harrier. They have bought our Harriers and they are now, under licence and in agreement with us, co-operating and building them for themselves.
This is a very short debate and it is high time that I brought my remarks to a conclusion. I should simply like to say that if this is an effort by the Opposition to paint a picture that shows our decision to have been a wrong one, they have so far not addressed themselves to the principal issues. I cannot take seriously a case which rests on a series of assertions about other matters and which does not get down to the real nub of the issue, which is that the RAF requires aircraft up to a certain standard to do the job. Could GEC's equipment have got up to that standard in three years? I have faced up to the truth, have


faced the fact that I do not believe that it could, and I have taken the necessary decision. I hope that the House will back me in that decision.

Several Hon. Members: rose—

Mr. Speaker: Order. The House knows that this is a three-hour debate. A great many right hon. and hon. Members wish to take part, so I plead for short contributions, please.

Mr. James Wallace: Many hon. Members recognise that decision that the Secretary of State has announced today was a difficult one. We have made it clear that, if it had been possible, we should have liked to see a decision in favour of the GEC option. There are obvious reasons in terms of British jobs, technology and export opportunities why that should have been the case. However, at the end of the day it is the defence considerations that matter. We have said that if only one option met the air staff requirements, that would be the proper decision for the Secretary of State to take.

Mr. Robert C. Brown: When the hon. Gentleman says "we", does he mean the Liberals, or the Liberals and the Social Democrats?

Mr. Wallace: I am speaking on behalf of my Liberal and Social Democratic colleagues in this matter.
At the end of the day we are dealing with a matter of judgment, and the House is being asked to accept the Secretary of State's judgment on which of the two options before him met the air staff requirement. He has told the House that on the advice available to him only the Boeing option met those requirements.
Because of the important consequences that that decision has for one of Britain's home-based companies, it is important that as much information as possible is made public. The decision must be seen to be right as well as be right.
In his statement this afternoon the Secretary of State described some of the considerations which led him to that decision. He has expanded on them in a letter which he sent to all right hon. and hon. Members and he has given more this evening. I urge the Secretary of State to place in the Library or to put on public record as much declassified information on this matter as possible because it is important that such information should be before the public. That is particularly important because, in statements made earlier this week, GEC has said that it felt that in some way it had been cheated. The more information that is available the more will GEC be able to challenge the various considerations that led the Secretary of State to his decision, if it feels it necessary to do so.
When the Leader of the Opposition intervened and said that the Secretary of State was rubbishing GEC by explaining to the House what had led him to his decision, he was being disingenuous. If the Secretary of State had tried to withhold from the House his reasons for coming to his decision, the Leader of the Opposition would have been on his feet crying foul again and saying that we were being kept in the dark. It is important that as much information as possible is made available.

Mr. Key: Does the hon. Gentleman agree that it is time to give the lie to the idea that no proper assessment has been made and that there should be some so-called independent assessment? As most of the assessment was done at the arms and armaments experimental establishment at Boscombe Down in my constituency, does the hon. Gentleman share with me an understanding of the deep offence caused to the scientific Civil Service by such allegations?

Mr. Wallace: I accept the hon. Gentleman's point. I have no reason to believe that anything other than the best military and technical advice was given to the Secretary of State.
Key points of concern were jobs and the quality of jobs. Boeing has made various promises and claims which it says will accompany the selection of its option. It has talked of a 130 per cent. offset and in one letter it has said that the high-tech involvement will lead to new products with guaranteed new markets and export sales. I think that the House would like to know precisely what those new markets and export sales that have been guaranteed are.
We have been told that British companies will be involved in further development of the AEW system and that there will be E3A sales to other countries in which British industry will have an opportunity to participate. If those guarantees come to pass they will be welcome. My hon. Friend the Member for Isle of Wight (Mr. Ross), who has aviation industries within his constituency in which Boeing has had some involvement, has found that Boeing has been good in keeping its word.
On this occasion, however, there has been serious competition, and in those circumstances I should have thought that the Ministry of Defence was in a strong bargaining position. Therefore, I do not understand why the Secretary of State was not able to get a better belt-and-braces clause in the contract to hold Boeing to the 130 per cent. offset. It is all very well to go on good faith and previous performance, but the history of the project has been so marred by what could be called weak contractual arrangements that, as we are taking it forward, one would hope that the Ministry of Defence could be much stricter in the conditions that it sought to impose.
Indeed, the Comptroller and Auditor General, in his report published in July this year with particular reference to this project, said that one of the main lessons to be learnt for project management was
to establish contractual terms to put the contractor under effective discipline".
There is considerable justifiable anxiety on the Opposition Benches that such an opportunity has not been taken.
A further point on the contract which I raised with the Secretary of State earlier this afternoon relates to extraterritoriality laws. As I understand his reply, it was open to contracting parties to choose which law they wanted and it has been the practice of the Ministry of Defence to seek United Kingdom law. Fears on this matter arise from previous experience with several contracts involving IBM when the United States Government have sought to assert their law over matters which are very much within the United Kingdom regarding whether certain equipment could be moved within the United Kingdom and having a clear say in which countries goods may be exported to from the United Kingdom. Again, we should like some assurance that it is perfectly clear in the contract that the United States will not be able at any subsequent date to claim that its law could apply to this contract.

Mr. Wilkinson: Will the hon. Gentleman clarify one simple point? Is his party, or the alliance that he is representing, in favour of the Royal Air Force having the best aircraft in defence of Britain as regards airborne early warning? That is not clear.

Mr. Wallace: I am working on the basis that the Government have made their decision, and I am trying to make it clear that, having entered into a contract, it is important that we get the best deal. One of my points concerned extra-territoriality. That is an important point that should be covered in the contract.
The Secretary of State said in a statement this afternoon that costs would be contained within the defence budget as outlined by the Chancellor in his autumn statement. However, it has already been confirmed in news reports that the Ministry of Defence states that the defence estimates do not include any additional spending for AWACs. As the Secretary of State said, the greater costs will come in the later stages in the early 1990s. That is the very time when the bulk of expenditure on Trident is expected. Therefore, the House should be told how the Secretary of State sees the defence budget panning out in the late 1980s and early 1990s when those two major projects will have to be funded. What will give? The Secretary of State has said in the past that some hard decisions will have to be made. Can he give the House any idea of the way in which his mind is working on those hard decisions?

Mr. Cyril D. Townsend: Will the hon. Gentleman give way?

Mr. Wallace: I have given way a lot and I know that other hon. Members want to speak.
The project is a sorry tale which shows up some serious deficiencies in the Ministry of Defence's procurement policy. With his usual disarming frankness this afternoon the Secretary of State said that he did not seek to evade his Department's share of responsibility. We look forward to a clearer explanation of where he sees his Department having gone wrong. The Comptroller and Auditor General in his report to which I have referred identifies many areas in which it has gone wrong.

Mr. Townsend: Will the hon. Gentleman put the House out of its misery? Is the hon. Gentleman recommending that his hon. Friends should support the bold decision to give the RAF the best possible system or not?

Mr. Wallace: We have supported the Secretary of State's brave decision. I cannot make it any clearer than that. However, many other questions have to be asked, such as how we ever got to this position in the first place. There are serious matters, such as £660 million of taxpayers' money having gone down the drain, that we wish to examine. The Public Accounts Committee is already examining it and I am sure that the Select Committee on Defence will wish to examine it. If local authorities had mismanaged that amount of money, Conservative Members would have been down their throats calling for surcharges.
The Government have a responsibility to the taxpayer for the way in which they manage the public purse and there have been serious shortcomings in that. We will be looking for those shortcomings to be examined and to ensure that lessons are learned and that proper procedures are implemented in the future. However, as I have said, it

is a brave decision and we hope that the Secretary of State can give more information to the public to show the full basis and jusfication for his decision.

Mr. Stuart Bell: On a point of order, Mr. Deputy Speaker. Is it not appropriate to write into Hansard the fact that the hon. Member for Orkney and Shetland (Mr. Wallace), representing the alliance, spoke entirely on his own without a single member—

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. This is a short debate and we should not waste time. The hon. Gentleman knows that that is not a matter for me.

Mr. Julian Amery: All my instincts incline me towards supporting the Nimrod project. It is a British project, we have sunk a lot of money into it, there are many jobs at stake and it is a pillar of our defence industries. It would be a popular decision for the Government to take and every consideration would seem to favour it—except one. My right hon. Friend the Secretary of State says that it does not do the job that is required. That is a strange and saddening reversal of fortunes.
Long ago, almost before the flood, I was responsible for recommending to the RAF and the Government what sort of aircraft they should have. I produced a programme that included the TSR2, the P1154, and the HS681. Nobody questioned the fact that they were technologically better than anything that could be obtained in the United States, France or anywhere else. The only criticism was based on cost. The Tory Cabinet accepted them. Then Mr. Wilson came into office with the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) as the Minister responsible for aviation. They cancelled all of those on the grounds of cost, not technology. They cancelled them roughly, but I do not want to go into that story now.
It is sad that we appear to be cancelling a project now, not on grounds of cost but because it is technologically not as sound as it should be. If it was technologically good and cost more, I would be in favour of supporting it. However, my right hon. Friend the Secretary of State has told us that it is not up to the job, technologically.
It is a difficult assessment for us to make. There are always people in the House who can make technical assessments, but there are not so many of us, I suspect, who can form a judgment on what is the margin between the two projects. I shall give only my own rough and ready measuring rod. When a Tory Government, in an election year on a defence issue, take an unpopular line they must have a damned good reason for doing so. Therefore, while I cannot say what the exact assessment may be, even with my own aviation background, it seems that the gap is pretty big.
If the world was peaceful and there was a general staff assessment that there would be no major conflict in the next 10 years, we could say that we could take second best for the RAF in the hope that it would help the defence industry to produce first best later on. I am afraid that the world is not like that. It is a dangerous world. The rearmament of the West is almost closing the window of opportunity that the Soviets have enjoyed since President Carter's time. That may make them more amenable to a return to detente, but it could precipitate adventures and risks. In that situation it seems to me that the interests of


the Royal Air Force must be paramount. We cannot take risks with the men who may—I hope that they will not—have to defend our shores, convoys and other interests at home and perhaps beyond the NATO area. They must have the best equipment available.
It is rather striking that the chiefs of staff, as I understand it—those who represent the Navy and the Army—have gone along with the decision made by my right hon. Friend although it is not necessarily the cheapest and may deprive them of some things to which they attach importance. The interests of the fighting services must be paramount in a dangerous time such as this and it is for that reason that, in spite of all my inclinations to buy British whenever we can, I support the Government wholeheartedly.

Mr. Doug Hoyle: When my right hon. Friend the Member for Llanelli (Mr. Davies) began his speech he said something that is true and that cannot be denied. He said that the sort of debate we are having tonight would not happen anywhere else. It certainly would not occur in the United States, France, Germany or Italy, because they would not surrender their technology in the way that ours is being thrown away tonight. We are trying to examine whether the British system, Nimrod, works. Indeed, we have it on the record from the Secretary of State that it does work. However, I should like the Secretary of State to answer the question that was put to him by my right hon. Friend the Member for Llanelli.
There was great play made in the statement by the Secretary of State, of the point that the failing of the British system was that when it comes to the final stage it would require the installation of a secure data link. I want to know whether AWACS has a secure data link. It is not clear from the statement. One would think that only Nimrod does not have a secure data link. If AWACS does not have a secure data link, what is the time scale for it to have one? Many technical questions have been asked but that is a technical question that we do not have an answer to.

Mr. Younger: There is a genuine misunderstanding here. I ask the hon. Gentleman to read the words of the statement very carefully. The reference in paragraph five is specifically to make it clear that GEC was offering to produce
six aircraft between mid-1989 and mid-1990 which would approach the final standard"—
That is fine so far—
subject to certain exclusions, of which the most important is a vital secure data link".
That is an exclusion from what it was expecting or expected to provide at that stage. That is because it is still under development. The same is true of the secure data link for AWACS. There is no difference between Nimrod and AWACS on that issue. There are plenty of differences in other ways but the systems are exactly on a par on that issue. I hope that that has clarified the matter.

Mr. Hoyle: I thank the right hon. Gentleman for his explanation. It does clarify the matter to some extent. However, it would not be clear from the statement that AWACS does not have a secure data link.
It is history and the role that the Ministry of Defence has had to play that I want to talk about. No one could ever accuse me of being a great friend of GEC. When it came to the Plessey takeover, I was on the side of Plessey. In this instance, however, I think that GEC is more sinned against than sinning. Many of the problems that have arisen are not its fault, and much of the responsibility for the time that has been taken rests with the Ministry of Defence. Many of us spent a great deal of time in 1977 persuading the then Secretary of State for Defence that it would be right to order Nimrod. The order was placed and at the very beginning GEC made it clear—this was done at one of the first meetings to be held—that one of the problems would lie with the computer. The civil servant concerned was a Mr. Geoffrey Stone, who was in charge of the project. Despite GEC stating that there would be problems with the computer—attention was drawn to the inadequacy of the performance of the 480 computer—nothing was done.
In 1978, GEC said that for £10 million—that must be set against the overall cost of the scheme now—it could filter out the misleading signals that were being picked up from cars and other man-made objects. Unfortunately, nothing was done from that time onwards. The Secretary of State has said that the goal posts have not been moved and the specification has not been altered, but it is my understanding that when the Nimrod contract was first arranged the purpose of Nimrod was largely to fly over the seas and the sparsely populated northern region. As recently as 1985 the specification was altered and it was—

Mr. Younger: indicated dissent.

Mr. Hoyle: The right hon. Gentleman shakes his head. If I am wrong, I stand corrected. In 1985, the MOD specified that Nimrod should be able to operate over large areas of Britain, and that was a different specification. Is it true that the MOD has asked for that change to be made? Has it asked that Nimrod should be able to fly over Britain? When the project started, it was never to be compared with AWACS in that respect. It would seem that the project has been changed.

Mr. Younger: I apologise to the hon. Gentleman for interrupting him again.

Mr. Hoyle: I welcome the right hon. Gentleman's intervention. We want the answers.

Mr. Younger: The hon. Gentleman is making a genuine point but I wish to make it clear yet again that air staff requirement 400, which is what the products are being tested against, did not, does not and, as far as I am concerned, will not, require any competitors to operate over heavily populated land. That was never the position, it is not the position now and it will not be the position. It was said when the product went into competition that such a function was not part of ASR 400, but that if those entering the competition wished to add that capability they could do so. The important decision that I have announced today takes no account of this. It was not a requirement of GEC to produce a system that would work over heavily populated land. That was not the position and it is not the position now, and as far as I am concerned that is the end of the matter.

Mr. Hoyle: I thank the right hon. Gentleman for clarifying some of the issues. He has responded to some


of the questions to which we were trying to get answers earlier on. I thank him for dealing with the technical data. I think he will agree with me, however, that although a caveat was added by saying that if a system could operate over heavily populated land it would be in a more favourable position, I was saying that when the order for Nimrod was placed, that capability was not set out in the specification or requirement.

Dr. Hampson: It would seem that the precise requirements stayed the same and that the RAF's interpretation of them changed. We have experienced enormous expense and delay because the RAF changed its view. It found that as Nimrod flew near land there was a flutter problem caused by low-speed items being picked up, such as motor traffic. AWACS never picks up moving items below 80 knots whereas Nimrod picks them up at 20 knots. The RAF took the view that the flutter with Nimrod was intolerable.

Mr. Hoyle: The hon. Gentleman is correct. I am glad that we are getting down to the nitty-gritty, to the technical specifications that we want to discuss. It is on these issues that we should be making our decision.
I am saying that many of the problems have been caused by the MOD. There have been problems because of the way in which the contract was placed in the first instance. The Ministry was reluctant to see costs increased, but the problems that arose could have been rectified early on if additional moneys had been made available. GEC drew attention to the problems at an early stage in meetings with the MOD and it was only when GEC took over the project in the last nine months and spent £50 million of its own money in doing so that the deficiencies were overcome. It got rid of the original computer and a new computer was installed along with a filtering system that stopped flutter. GEC says that the project is 85 per cent. efficient when set against the specification, which is an enlarged specification, and that is not denied. Indeed, I think that the Secretary of State has acknowledged that that is so. If GEC can fulfil 85 per cent. of the specification and if it has made so much progress in the past nine months, why throw it all away now?

Sir Adam Butler: Will the hon. Gentleman give way?

Mr. Hoyle: I do not really wish to give way because many other right hon. Members wish to contribute to the debate, but I shall do so in this instance. We are establishing some facts.

Sir Adam Butler: As an advocate of the GEC case, the hon. Gentleman has made a remarkable statement. He has said that progress in the past nine months has been excellent, and I think that we are agreed about that, but he is implying that GEC knew the answers before that period and did nothing to produce them.

Mr. Hoyle: No. The right hon. Gentleman has it wrong. GEC wanted to produce the answers and wanted to put things right, but it could not obtain the funds to allow it to do so and it was not allowed by the MOD to take that course. The fact is that the Ministry was trying to work to a specification that was unworkable. In the end, however, GEC tried to put things right. That is why I am saying that, once GEC took over responsibility for the contract, great progress began to be made. I repeat my statement

that the progress that it has made is remarkable. Bearing that in mind, surely we should be able to give GEC a little more time.

Mr. Nicholas Winterton: Bearing in mind that the first six units will not be delivered until 1991, does the hon. Gentleman agree that so much progress has been made by GEC that it is insanity to sacrifice a system that is more sophisticated and advanced than AWACS, especially when we consider the public investment that has been made? By 1991 we could have six British Aerospace Nimrod 3s working to the specification of the Ministry of Defence.

Mr. Hoyle: I am so pleased to hear a Conservative Member speaking up for Britain.
I recall that when many of us were pressing the Secretary of State for Defence to order the Nimrod project, the RAF was against it. It has never changed its mind. It wanted AWACS originally and it wants AWACS now. As the RAF does not want Nimrod, would it not be better to initiate an independent assessment of the sort that has been pressed for by both sides of the House? Surely such an assessment would reveal the facts. It is wrong that the RAF should be the prosecutor and a witness at the same time, and that is what is wrong with the case which has been built up so far. We would not lose anything by allowing an independent assessment to take place. Indeed, we could gain a great deal.
I remind the right hon. Gentleman that we could save 3,500 jobs in high technology. We could maintain the lead that we built up. Apart from America, this is the only country involved in this work. We could be still there. We could gain valuable export markets. We know that Lockheed of Georgia is prepared to put in the C130. It could be exported to many countries.
I do not wish to take up any more time—I could—because many hon. Members wish to speak in the debate and add their expertise. This is a black day for the country. It is a black day among many recent black days, such as when we had the Westland dispute, when the Government tried to give away Land-Rover and Leyland lorries to General Motors and when we knew that Austin Rover was talking to Ford. Perhaps I am unfair to the Government, but it appears that they cannot give British industry to America fast enough. That is not the way that we should go. All hon. Members should stand up for British technology and maintain our belief in it by saying, "Let us give it a little more time. Let us develop it so that we can get into the world market. Let us develop a project of which we could all be proud." Despite the right hon. Gentleman's statement, I hope that he will go away and, over Christmas and new year, when he has a little time—I know that it is difficult in Scotland during Hogmanay—reflect on what has been said in the House. I hope that he will come back and say to GEC, "I shall give you the independent assessment that has been requested."

Mr. James Prior: I declare a fairly large interest in this debate. I make no bones about it. I do not see why hon. Members who have an interest should not declare it or should not take part in the debate. I think that the House gains something when people who have outside interests are able to play a part in debates.
There was criticism because, on Tuesday, I asked the Prime Minister a question. I gather that the Whips said


that they thought that it was unethical that I should do so. I have taken and given a good deal of stick over the years, and I bear no malice. The Government are a good deal better at giving stick than I ever was.
I unreservedly accept that my unpopularity in certain quarters has had nothing to do with this decision. I hope that all hon. Members will accept that I genuinely believe that, even if the national press does not. I regret the decision. It is wrong and it is a setback for Britain. This is an important contract because of its size and, of course, its prestige. It is one large job and it will not materially affect a company as large as GEC. Many lessons are to be learnt from this contract and from what has happened. I hope that there are no more cost-plus contracts, except during the early stages of development. Frankly, this contract has been thoroughly badly handled. GEC must take some of the blame, but the main culprit must be the Ministry of Defence. It was responsible for deciding on the money and the way in which the contract should be operated.
It is common knowledge that, time and again during the course of the contract, there were delays in obtaining equipment that GEC said was necessary. Years ago, it was said that the project would require a much greater capacity computer. I have seen the minutes of the meetings. GEC was not allowed to get the computer.
When it became clear that there was a clutter problem when looking towards land, it was said that there would have to be a traffic correlator, but we were not allowed to put one in. The transmitter is the most important item. Unless the transmitter works effectively and with power, nothing else in the aeroplane can work. The transmitter should have had a complete series of tests on the ground, but they were cut out during the moratorium of 1980–81 because there simply was not the money. The contract was handled on the basis of money, not performance. That is the lesson that we must learn for the future.
Eventually, the contract came to an end. A mistake was made by GEC. It should have stopped work on this contract at least five years ago, but it did not. It is tempting to take the attitude that one is being paid cost plus 4 per cent., so one goes on and hopes that something will turn up. It is a cosy relationship, but it simply does not work.
Since March, we have been operating on an entirely different basis. The right hon. Member for Llanelli (Mr. Davies) was wrong to say that it is £50 million of GEC's money. Since March it has been £25 million of GEC's money and £25 million of the Government's money. Since that time, we have been the main contractor. We told the Ministry of Defence what we would be able to achieve from March to 3 September. During that period, we achieved or exceeded all the items which we set out to improve. Two items in particular were clutter when looking towards land, which required the correlator, and the ability to see targets.
The spirit of the agreement that we entered into was that we would work together. We said that if, at the end of the six-month period, we were not able to make the necessary progress, we would accept that other firms would have to be approached and we would give up the contract. During that period, we made all the progress that we should have made. During that period, five progress reports were sent to the Ministry of Defence. On only the first report was any criticism made to us. I do not believe

that anything is now known about the operation of Nimrod as against AWACS that was not known in March or earlier. One of my main contentions is that, quite frankly, from what we have heard today, they should not have gone on working after March. They should have cancelled the project then and gone for AWACS.
That was a difficult time for the Government because it followed the Westland and Rover incidents and there was a lot of anti-Americanism. The Government did not pursue AWACS. They kept on with the contract. There was a case then for cancelling it. The Government should not have taken £25 million of GEC's money in the way that they have since that time. [HON. MEMBERS: "Oh."] I do not expect any sympathy for that point, but it is an important ethical one that we should not forget.
I appreciate that the Secretary of State has had a difficult job. I wish to ask him a few relevant questions about the statement. His fifth point was that the Under-Secretary of State for Defence Procurement announced that, for Nimrod, we had negotiated with GEC revised contractual arrangements involving a sharing of financial risk with the company and giving it adequate incentives for completion. I should like to know what were the adequate incentives for completion. To my knowledge, the only incentives for completion were that, if we were successful in the final contract, we would be paid only 50 per cent. during the course of the contract until we had completed it to the final specification laid down by the Minister of Defence. Until that time, we would have been working entirely with our own money, and it could have cost us as much as £200 million which, even for a company the size of GEC, is a considerable amount.
I agree with my right hon. Friend the Secretary of State that the ASR 400 has not been changed. That is not what matters. The interpretation that has been put on it is what matters. Since 1979 there have been no fewer than 3,845 modifications. That tells us something not only about the complications of the project but about the interpretation of the ASR 400. The truth is that we could have got on with the ASR 400 if we had not been denied or delayed in the resources required at the right time. If we had been able to test the transmitter and it had worked, many of the problems that occurred when the aircraft was in the air and the radar was being tested could have been overcome more quickly.
Point 5 of the speech by my right hon. Friend the Secretary of State refers to the final time scale which is laid down for the provision of these aircraft. My right hon. Friend is right; we would have delivered the aircraft by 1990. The only outstanding problem at that time would be the joint tactical information distribution system. JTIDS is something that the Americans have to produce and that the Ministry of Defence has to buy and something over which GEC would have no control, so please do not let anyone blame us for the delay after 1990. We would deliver the aircraft by 1990. We have said so. If we refused to do so, we would be paid only up to 50 per cent.
My right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) made a remark with which I fully agree. He said that, generally, our technology has been of high quality but our costs have been too high. I talk to our technicians regularly. They are bitterly disappointed because they feel that they have been judged unfairly on their technical performance. During the past few weeks, they have said to me repeatedly, "We would not have


minded if we had been beaten on price, but we mind desperately that we have been judged as being beaten on our technical performance."
There have been technical disappointments, but, as I have said, we set out with limited objectives in March and we have fulfilled them. I shall not go into the problems that remain—I have written to my right hon. Friend the Secretary of state about them—but they can be solved. We have shown not only the improvements which we have made but how further improvements can be made to bring us up to the necessary specifications. I do not think that "technical disappointment" is a fair way of expressing what has happened.
I come to the figures in paragraph 10. Frankly, I simply do not understand them. The total figure put in by GEC Avionics for the whole job on a fixed price, including inflation, was £508 million, which was to provide 11 Nimrods to the specifications laid down in ASR 400. Today we were told that we shall get six AWACS for £860 million—which does not allow for inflation, as we heard from my right hon. Friend the Secretary of State—and my right hon. Friend is taking an option on two more. Those eight AWACS are hardly equivalent to 11 Nimrods—in fact, to be on equal grounds, there must be 10 AWACS. But let us say that there are eight AWACS, which is £860 million plus the cost of the two on option, which takes the amount to about £1·1 billion. A little must be added for inflation, because the first aircraft will not be delivered until 1991, so let us say that the amount will be £1·2 billion. That is precisely double the amount that the 11 Nimrods are due to cost, and which we have guaranteed. It is not £200 million more but more than double.
We delude ourselves as a country if we do not get these figures in the right perspective now. I shall not be in the House to complain—I dare say that my hon. Friend the Member for Macclesfield (Mr. Winterton) will be on his feet quickly to complain—in five years' time when the cost has gone up and it is shown that it is double the cost of Nimrod. I am not at all happy about the figures that have been produced.
I can understand that there was not a great argument about the cost by the defence chiefs, because they know that there is not much cost for the next three years. They know that there will probably be less of a cost for the next three years and that the main cost comes later. As we all know from our political experience, we do not really care what happens in four or five years' time because we do not know whether we will be here. It is a problem for someone else to sort out. That is nearly always where we go wrong.
Many subjective judgments have been made, and I do not doubt that I am making a few. It is extraordinary that, in a contract as technically difficult as this, the advice from everyone in the Ministry of Defence has been unanimous. This must be the only time that this has ever happened. It is too good to be true. It leaves me with a sad feeling.
The defence industries are important to this country. It is essential that we do not have this terrible hiatus ever again. The Ministry of Defence must recognise not only that it is a major contractor and customer, which is responsible for a tremendous number of orders, high technology and employment in Britain, but that other countries look at us and see what we are doing. If they see that we are making a mess of this, no matter whose fault it is—we take some of the blame—it has an impact on what happens to other defence contracts. Our competitors

abroad will be going around saying to our customers, "Look what they have done. They have left it. They were not satisfied." That is a very dangerous position for this country to get into.
We must co-operate more. There is not enough co-operation between the defence contractors and the Ministry of Defence. In my experience, we talk much more to our other customers than to the Ministry of Defence. We need quickly to look at that aspect. GEC and the Ministry of Defence need to repair a few fences quickly. I say that not necessarily because my making these comments may obtain more orders but because I genuinely believe that, unless there is that good contact and good understanding between the two sides over what is important for Britain, we cannot possibly get it right.
Grave charges are being levelled by GEC employees who have had good relationships with the radar establishment and with the Ministry of Defence for 15 to 20 years and who feel that this time something has gone wrong. They do not know what it is. They have not been told during the past few months what it is.

Mr. Nicholas Winterton: Nor have we.

Mr. Prior: No one has been told. I should expect that, in a contract of this nature, as with most contracts, when things were going wrong, there would be discussion between the contractor and the customer.
Of course, we have to accept the decision. The RAF has always wanted AWACS and I do not see why it should not want AWACS. It has always wanted it and I do not impugn the RAF for that because it flew me across the Irish sea so many times over a three-year period that I would never say that the RAF was not perfectly entitled to fight hard for what it requires. However, the decision is a setback for Britain. It is a great disappointment, especially for the work force. It is a disappointment for those Conservative Members who, in difficult times, have supported me and the company, and I am grateful to them for that. We owe it to all the people who will lose their jobs over the next few weeks in unpleasant circumstances to ensure that this kind of thing never happens again.
It may not be a very good story from the company's point of view, but I think that the Ministry of Defence has a very heavy responsibility for all that has happened which has led to the decision.

Mr. Lewis Carter-Jones: I am grateful for the opportunity to make my speech after the right hon. Member for Waveney (Mr. Prior). It is a great pity that this debate did not take place earlier. It would have been better if these matters could have been discussed before. I am sorry that the Secretary of State has left the Chamber, but he has been magnificently honest in response to questions. He has clarified many issues for us tonight.
The statement that the Secretary of State made today was particularly helpful. In that statement, he said that it is most important that there is a "vital secure data link". As an ex-RAF navigator during the war, I can appreciate that it is not very funny sending out signals telling the enemy where you are. My hon. Friend the Member for Linlithgow (Mr. Dalyell) asked whether that data link applied to Nimrod as well as to Boeing. There was some confusion but eventually we were given a clear answer. We were told that the "vital secure data link" which, in the


statement is said to be a disadvantage to Nimrod, is actually a disadvantage for both aircraft. The Secretary of State was absolutely honest and positive about that. The alleged defect in Nimrod occurs in both aircraft.
Several other points have arisen in the debate that are important. I want to stick briefly, if I may, without romancing too much, to the letter which the Secretary of State produced today and his statement. The Secretary of State has said that the GEC offer covers three levels of attainment. He spells those out. He also referred to the first three aircraft that will be available in 1987 and he said that they will be no good because they are of an unsatisfactory standard for training. I have never heard so much cobblers in my life.
In the RAF, we were trained in what was known as mark 4 AI. We then used mark 8 AI and went operational on mark 10 AI. It is not unusual to be trained in the forces on a piece of equipment that is not completely modern. The Secretary of State and I flew in an aircraft which was perfectly adequate for training purposes. It ought not to have been dismissed in that manner.
Many important points have been raised in connection with phases 2 and 3 regarding the performance of Nimrod. The right hon. Member for Waveney was absolutely correct when he referred to the improvements. I flew on Nimrod and there were GEC boys present who praised Nimrod. Hon. Members have said today that of course they would do that. However, standing behind me at that circuit was a squadron leader radar navigator from the MOD. He said the same so I was not being fed bull; I was being fed the truth.
The GEC boys demonstrated a situation in which there was clutter. My God, there was clutter. It was impossible to pick up anything. They then switched in the computer — which has only recently been fitted — and the performance improvement was remarkable. That factor has not been taken into account.
I have knocked GEC in the past and it is far from blameless in this matter. However, the improvement in the past six months has been demonstrably remarkable. GEC deserves the faith of the Ministry in this matter because it has performed extremely well.
My hon. Friend the Member for Linlithgow and my hon. Friend the Member for Warrington, North (Mr. Hoyle) have managed to discover that the time scale in relation to the "vital secure data link" is not available for either aircraft. That appears in the statement as a criticism of Nimrod, but is not. We must return to the other time scale. In passing, I hope that GEC would not object if the MoD, in its infinite wisdom, decided to invoke and invite other electronics experts in this country to participate to resolve the problem. There would be no harm in that. The main contract remains sacrosanct.
We shall not have a Boeing until 1991, as stated in the fifth point in the statement. The Secretary of State was very honest about that. The implication of that is that he has presented us with a reason why we should persist with the Nimrod project. That is loud and clear.
I hope to God that the House can achieve a deathbed repentance on this occasion and revoke the decision because it is wrong. At the end of the war we had one of the finest air interception facilities in the world called mark 10 AI, but we lost it. That system could have been modern for the next 30 years, but we lost it to the Americans. We

have a distinct chance, if we do not proceed with the project, of losing this technology in its entirety. This technology has an advantage outside military use. There is a great problem with clutter at civil airports and with holding people off. The equipment would be extremely useful in civil aviation. There would be that spin-off.
When the Secretary of State referred to cancellation, his hon. Friend the Member for Woking (Mr. Onslow) asked about the horizon issue. He asked if there was a relationship between the horizon and the height at which the aircraft flies. The Secretary of State said that there was a correlation. He said that as if it was a new discovery. However, we knew 15 to 20 years ago that Nimrod operated at 26,000 feet and Boeing at 29,000 feet. The horizon issue was common knowledge all those years ago. It is not a technical point; it is a matter of fact.
I make this plea. I have no commercial or constituency interest in employment terms in who receives the contract. However, I have an interest in the Royal Air Force. I believe that the RAF has been misled on this occasion. The progress that has been made by GEC, for aircraft that have already been paid for, represents a chance for us to lead the world in this technology. We must not throw that chance away.
The row over Westland and the resignation of two Secretaries of State was a great mischief. The row was about helicopters. There was an air staff target for helicopters. AST 402, and the W30 built by Westland, were built to meet that specification. The Ministry of Defence ratted on it, which is why Westland found itself with a massive cash flow problem. At the end of the day, when all the dust has settled, the row has finished and the quarrelling is over, what is the truth? The truth is that we do not haw sufficient helicopters today for the needs of our forces. That is the tragedy.
When one considers the clutter question of ASR400 it seems that GEC has produced equipment higher than the air staff target in urban areas, especially near Sheffield and Edinburgh. I applaud the honesty of the Secretary of State, but I urge right hon. and hon. Members to consider that they are chucking away an important and valuable piece of advanced British technology.

Mr. Cecil Parkinson: I am in the rather strange position of probably being as ignorant about technical matters as it is possible to be, yet having in my constituency industries which are working at the edge of the most advanced technology. I suspect that, in common with many hon. Members tonight, I have the disadvantage of being asked to pass judgment on a project, product and system which few of us understand and on which few of us are qualified to pass any technical judgment.
We may agree on more matters than one would have guessed from listening to some of the debate. Indeed, I am glad that it has settled down after its bad-tempered beginning. No hon. Member, including those on the Front Bench, would not prefer to buy a British AEW system. No hon. Member does not agree that there would be nothing patriotic about landing the RAF with a second-rate system. We are talking about developing an airborne system which is a vital part of the nation's defences and it must be common ground that it must be as good as possible.
We all agree that for the target to be running so late and so heavily over cost suggests either hopeless optimism at


an early stage—I suspect there was some of that—or appalling target control or, possibly, a combination of both. Certainly there are many lessons for the Ministry of Defence and the House to learn from the project.
It should be common ground that it cannot be easy for a Government—nor should it be for the House—to decide to write off at the end of a three-hour debate nine years' work of thousands of people and £700 million of taxpayers' money. Tonight we are taking a big decision.
I have one small criticism of the Opposition which is that they were extremely foolish to demand a Standing Order No. 20 debate so soon after such a highly complicated statement. This is probably the last chance that the House will have to debate this subject and we are disposing of it in three hours. The Opposition have nobody but themselves to blame for limiting the time available.
In making his statement, my right hon. Friend, by implication and sometimes directly, acknowledged some of the advantages of Nimrod. He acknowledged the cost and minimised the difference. Indeed, he probably gave a much fairer assessment of the potential savings from buying Nimrod. We should not ignore the fact that the technology, as developed, would have been British and ours to exploit.
Boeing promises to bring jobs here, and I do not doubt its determination to try to honour its word. Nevertheless, it will be bringing us technology for us to work on and we will be surrendering wholly British technology which could have been ours to exploit.
At the end of all this debate, the judgment, which we in this House are barely qualified to make but must do so, is to decide whether the Secretary of State, having taken the best advice he possibly can, and having considered it extremely carefully, is right. I know him personally and I am sure that the House knows that he cannot have found this decision an easy one. I have heard the Secretary of State defend projects in Scotland. We have maintained projects in Scotland when the economic justice for doing so has quite often eluded me. The Secretary of State has strong credentials as a man who likes to back British and would not take a decision like this one easily.

Mr. Dalyell: Scottish or British? GEC in Scotland will be hurt.

Mr. Parkinson: I am including Scotland as part of Britain. I hope that the hon. Gentleman is not offended.
We are told that this project is not capable of working.

Mr. Nigel Spearing: It is working now.

Mr. Parkinson: We are told that even in the mid-1990s it is not sure that the system would work. What we are effectively being told is that the system will not work. It is on this important issue that I wish to draw on my experience.
In my constituency I have the factory or the base in which most of the technology is being developed. I know many of the scientists and technologists who work there and I have seen with my own eyes the progress that has been made in recent months. It is here that I must part company with my right hon. Friend the Secretary of State for Defence.
I find it impossible to believe that in nine more years—that is the assertion made in the Secretary of State's

letter—even by the mid-1990s, we will not have the technologists to crack the problem. I know these people and they are a most impressive group who have made tremendous progress in six months. I find it an incredible statement in the assessment, that in nine more years there is still no certainty that these technologists could crack the problem. The company has made the assertion that it could be done in three years and it has made an offer to back up that assertion with a substantial sum of money.
I started by saying that I was well aware of my lack of qualifications for making what is a technical judgment. What we are saying today is that this House has no confidence in British technologists' ability to crack the Nimrod problem. The Secretary of State believes that he is justified in making that statement. He has considered the matter carefully. I am afraid that I cannot join him in a condemnation of the capabilities of my constituents and those technologists that I know. He may be justified in taking this decision, but I cannot go with him.

Mr. Tam Dalyell: I am not interested in the party politics of this matter but I say to the right hon. Member for Hertsmere (Mr. Parkinson): "Be fair." The Opposition pleaded to have this debate before the Cabinet decision was taken. My hon. Friend the Member for Warrington (Mr. Hoyle) and many others begged the Government to give time so that the House of Commons could have some input in the decision rather than a postmortem afterwards. That is what we were begging for.
It all comes down to the treatment of the House of Commons. I do not make too much complaint that the Prime Minister is not here and that the Secretary of State for Defence has gone off for television engagements, but it is high time that the House asserted itself and expressed its views before, rather than after, decisions are taken. Again, we are crying over spilled milk.
I very much welcome the presence of the chairman of one of our great companies. It may be that the House is a bit poorer for not having the Sir Alfred Monds of the day and the major trade union leaders in the House.
I draw the Minister's attention to paragraph 12 of the Secretary of State's statement, which said:
The loss to British defence technology will be solely in this highly specialised field of large and advanced AEW systems, and it is not strategically vital for this capability to be retained in British industry.
That is what the Secretary of State said this afternoon, but we should listen to the chairman of GEC who said that our competitors around the world will be making play with what the British Government have done. He is right.
All of us who have industrial concerns in our constituencies and know something about their export difficulties are aware that the decision will be used against us in all sorts of areas. Paragraph 12 of the statement is just not true.
I was a bit shocked because the chairman of GEC said that the decision was not taken in March because of Westland and Leyland. That reveals that the politics of the situation was paramount. I do not want to be cheap about it, but who is playing politics with defence now?
There should be some explanation of the transmitter not being tested on the ground. If the money was not available for such a central and basic issue, what on earth was the reason? I hope that we shall have an answer to that question in the winding-up speech.
I knew that there had been a lot of modifications, but how many hon. Members knew that there had been 3,845? My hon. Friend the Member for Coventry, North-East (Mr. Park) has engineering experience. How can one produce anything with that kind of constant change and nagging? No industrial designer can cope with that, let alone cope with it and keep within cost estimates.
My hon. Friend the Member for Dunfermline, West (Mr. Douglas) is a member of the Defence Select Committee and he said to me, "If you are called, for heaven's sake ask them what are the through-life costs." This is a specific question for the Minister's winding-up speech. What are the comparative through-life costs for AWACS and Nimrod? Perhaps the right hon. Member for Waveney (Mr. Prior) has an answer in his notes. GEC must have given some attention to this problem of through-life costs. The rest of us do not know, however, and it is a vital question. I shall give way to the Minister if he knows. Perhaps he will tell us later.
Boeing has a very good record in offsets. I do not think that anybody can deny that. Indeed, Boeing probably has a better record than any other American company, but that was before the Glenn amendment. The atmosphere in the United States is altering. Ever since Senator Glenn of Ohio brought in that amendment, admittedly in a different context, things have been different. We have seen that with the strategic defence initiative.
My constituents at Heriot-Watt university are doing work on optical physics, and, controversially, have taken £1·2 million or thereabouts from the Pentagon to keep the university physics department going. That is a paltry sum compared to the huge sums that were dangled before the House when my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) and others were asking about the industrial aspects of this matter. We live in a post-Glenn time.
The Royal Air Force has air staff requirement 400. Is that some sort of tablet from on high? Like the chairman of GEC, some of us do not believe that the Ministry of Defence was unanimous in its decision. I repeat the question: are we sure that in the next three or four years it will not dribble out that the decision was far from unanimous? I will bet my bottom dollar that, sooner or later, people will crawl out of the woodwork in the Ministry of Defence saying that they never wanted that decision. That will happen, because it has happened before.
The Secretary of State said that the secure data link was now on a par. A secure data link is absolutely crucial. I do not want to vaunt my qualifications, but for 20 years I have been the weekly columnist for New Scientist. I have many contacts and people tell me that, without a secure data link in the next generation, it is foolhardy to go ahead with the project. The AWACS project is a bit dated. It has already been going for eight years. It has the virtue of being tried but it has problems. I do not say that the secure data link is vital. The Secretary of State said in his opening statement that it was vital that it was sorted out. Who has the greater chance, GEC or Boeing, of coping with this crucial problem? I am told by people who are in a position to know that if they had to put money on who would first arrive at an answer to the secure data link, that money would go on GEC and not on Boeing. What does the Ministry of Defence say to that?

Mr. Edward Heath: In the latter half of the debate we have been getting down to the basic facts about this issue. The Secretary of State said that the issue was complex, and we sympathise with him in having to reach a very difficult decision. The number of right hon. and hon. Members who wish to take part in the debate demonstrates clearly that this announcement should never have been kept until the last Thursday before Christmas. It should not have been left to an emergency debate. The Government should have provided the time for the debate, and they should have provided that time before they reached a decision. That would have given the Secretary of State an opportunity to explain many of the matters which are still confusing to the House and certainly to the public.
My right hon. Friend the Member for Waveney (Mr. Prior) has shown how valuable it is to have someone in the House who holds a pre-eminent position in industry, and who can put the other side of the Government's case. Good government, as we learned above all during the 1930s, depends on having in the House people who have the information themselves, and who can therefore challenge the Government on any big issue. Otherwise the House just becomes a poodle of Government.
There was a time when industrialists and top trade union leaders came to the House in order to make a contribution. They did not seek office, but wanted to give their information and knowledge to the House so that hon. Members could reach better judgments. Those industrialists and trade unionists have all disappeared. We must now wait until a Member of Parliament becomes distinguished in the House. He may then go off to industry and, in some cases, be able to enlighten us.
My view on the decision is that it is sad and regrettable, and I certainly cannot support it. My right hon. Friend the Secretary of State said that the interests of the services and of the Royal Air Force are important. He was absolutely right. I admire very much the work that he is doing as Secretary of State. But I do not accept that the views of the services or of the Royal Air Force, in particular, are paramount. They are not.
I must apologise to my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) if for once in our lives we disagree. The views of the services are not paramount and I suggest that the right hon. Member for Llanelli (Mr. Davies), who opened the debate, has jumped on the bandwagon, just as the Leader of the Opposition jumped on the bandwagon of "paramount" at Question Time today. Those two right hon. Members are in an extremely dangerous position, and they will find themselves tied to it if ever they get into office—which I very much doubt. It is a very unwise position to adopt. Hon. Members should look at the problems to which we are tied now because we were told that the views of the Falkland islanders were paramount. The view of this House is paramount and the view of Parliament as a whole.
The chiefs of staff do not have responsibility for the Budget or for finance. They do not have responsibility for employment and jobs, or for exports and export performance. They do not in the least have that responsibility, and it would be wrong to charge them with it. Therefore, their position is one factor in the overall situation.
It is clear that, from the point of view of the Budget and of finance, of jobs and employment, and of export potential, everything in this case is on the side of GEC, and to a certain extent on the side of Nimrod as a whole. It is only on the argument about technical achievement that there is any difference. Of course, the chiefs of staff and the experts can give their views on that. But it is the Government's responsibility to take the decision and they should not say, "This was the advice that we received from the chiefs of staff." There was a time in the House when no reference was ever made to advice received from chiefs of staff or from any military. It would be a very good thing if we returned to that position. Governments are then prevented from trying to shift the responsibility on to those who are advisers, and no more than that.
I have also been somewhat shocked by the naive simplicity sometimes shown by my right hon. and hon. Friends behind me about the views of experts. The House is not governed by experts. Our task is to take experts' views and to tear them apart as skilfully as we can and as often as necessary. It is only in that way that we shall find the overall solutions that are necessary.
I shall now concentrate on the specific position of GEC, and on some of the confusions surrounding it. I accept that the specification has remained the same except, as we were told, for refueling in the air. But to use a term that is, I believe, now used in fashionable circles, that is an economical use of the truth. It is not only the specification that is important but the steps taken by the Ministry of Defence in order to insist on how that specification should be reached. When there are more than 3,000 alterations, long delays on the part of the Ministry of Defence before it says yes or no to a proposition from the company, and when money is refused for changes that the firm wants in order to reach that specification, we can see a long, sordid history of delay, lack of finance and incompetence by the Ministry of Defence. Nor is it, alas, alone in our post-war history.
For example, we have lost the greater part of our civil aviation industry because the British Overseas Airways Corporation insisted on specifications that prevented the export of aircraft to other countries, because they did not have the same idea of route lengths, and so on. Moreover, there were all the alterations that that company made as the development went along, which led to delays in the production of aircraft. The civil aviation industry tells a sad, sad story.
In this case, the important part is the confusion about specification and about how it is to be implemented, and that is where the Ministry has its say. There is then the question whether the aircraft had to cover overland operations. I do not think that we are talking so much about confusion as about a difference of definition. When dealing with North sea waters, it was found that to a certain extent operations overland were involved. That is quite different from saying that thickly populated areas on the continent of Europe had to be dealt with as well. But those are confusions and an economical use of the truth.
After nearly nine years of delay, obstruction and lack of Ministry finance, the firm managed to make extraordinary progress in nine months once it had taken control of the contract. It is contributing half the finance and is prepared to continue doing so. This is a remarkable change, and I congratulate those who have been responsible for it.
As the firm is now approaching so closely to what is required under ASR 400, my view is that the Government and the Ministry of Defence should work with it to enable it to achieve those financial results. Why should we use our research laboratories and so-called experts only to pull the thing to pieces and engage in this orgy of suicide, from the national point of view, which so many of them want? They should be used to help the firm to overcome the remaining difficulties and solve the problems. That is what they are there for. Why do they not do that?
Where I differ from the judgment of my right hon. Friend the Secretary of State is in my belief that, having achieved so much in nine months, the firm should be given the opportunity of carrying out the timetable into which it is prepared to put its money as well as Government money. Then we shall have the opportunity of more advanced technology than the Americans will provide through Boeing, and the opportunity of selling it in the world markets. We shall maintain British prestige and advance our own technology in a specific but important sector. What is more, we shall maintain the morale of those in industry who have been striving to achieve the target that we have set them.

Mr. John Wilkinson: The speech of my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) has saddened me. In many ways it was not worthy of the occasion. It was looking backwards and it was not addressing the threat that we face from a greatly enhanced Soviet air force and naval air forces. In the past 10 years, the threat has been growing steadily and it is a threat from such aircraft as the Backfire supersonic bomber and the Fencer fighter bomber. Both these aircraft can strike at these shores, and if they are to be intercepted they have to be intercepted as far away as possible. The Backfire, for example, has a stand-off capability, and that is why interception at long range is so important.
In peacetime, the views of experts, as my right hon. Friend so disdainfully calls them, may not seem important. We can derogate the weight that we attach to the specialist advice of those who may ultimately have to put their lives at risk on our behalf, but I am absolutely certain that if we were to go to war, we should wish for our armed forces the very best. It is most significant that the Army, the Navy and the Air Force are united in their advice to my right hon. Friend the Secretary of State. Most importantly, the Royal Air Force itself—

Dr. Keith Hampson: Will my hon. Friend give way?

Mr. Wilkinson: No, because time is short.
In making its choice, the Royal Air Force is conscious that it is reducing the amount of money for its future programmes and it attaches great weight to airborne early warning. Neither the land battle nor the war at sea can be won without a favourable air environment. Our own population, our families, cannot sleep safely in their beds unless they know that the United Kingdom air defence region will be properly policed and guarded by interceptors that are directed to their targets by the very best airborne early warning system available.
There is no doubt that the contractors have had time enough. The specification, the air staff requirement, was set back in 1976, the Nimrod AEW programme was


initiated in 1977 and the AWACS for the NATO European countries was initiated one year later, in 1978. Yet AWACS came into service in time, in 1982. That was when the first Nimrod AEW aircraft should have been delivered for training to the Royal Air Force. Since then, our NATO partners have had the benefit of this additional security. It is a classic example of what should have been a collaborative programme from the outset.
With hindsight, we all regret that that decision was not taken. However, it was not, and in a cool, calm and highly rational manner my right hon. Friend has had the courage to grasp a difficult political nettle. I have known, literally for years, about the deficiencies of the Nimrod system for airborne early warning. I have not spoken out. To have done so would, I felt, have been prejudicial to this country's security interests.
However, in the spring of 1986 my right hon. Friend the Secretary of State was entirely right to say that enough was enough, that good money could not be thrown after bad, that the contract should be thrown open to competition, to make GEC assume leadership of the project, put in its own money and see if it could come up with a solution that would beat the competition within a reasonable time scale. It could not do so. As it could not do so, my right hon. Friend had to make the appropriate decision. I believe that he has, and his courage deserves to be commended. I am sure that the country will be grateful for his courage, because now our countrymen can sleep more safely in their beds.

Mr. Robert B. Jones: I am grateful to you, Mr. Speaker, for allowing me to catch your eye, because the GEC factory at Hemel Hempstead in my constituency is where much of the work on the development of Nimrod has been done. Those who have been involved with the project are dedicated avionics workers. They are fully committed to the defence of Britain, otherwise they would not be there. There has been uncertainty over their future in the last few months, but in the last few days it has turned to anguish. Therefore I want to identify some of those who I think are responsible for that anguish.
My right hon. Friend the Secretary of State for Defence told us today—although we have heard about it for several days in the press—that Nimrod does not fulfil the requirements and that therefore it must be scrapped. I do not doubt that my right hon. Friend reached his decision after a great deal of difficult and careful consideration. No Government, of whatever complexion, would have done other than buy British, if that had been possible. No Government would unnecessarily waste £660 million. My right hon. Friend must surely, therefore, have satisfied himself that Nimrod was unlikely to work properly on any reasonable time scale.
The historic background is important. My constituents have been working on this project since 1977. By March 1986 the consensus was that the system was not satisfactory. Nobody has challenged that assumption. The Royal Air Force says that it laid down clear requirements. As we have heard tonight, there was only one change—the requirement for an air-to-air refuelling capacity. With that one exception, the requirements remained unaltered

until GEC was given a lower revised target, called an "interim operating standard". I am sure that that is true. However, it is misleading.
For the first eight and a half years of its life, the Ministry of Defence effectively ran this project. The MOD determined precisely what work should be carried out by GEC, and in many ways how it should be carried out. The civil servants therefore carry an enormous responsibility for the lack of progress. I should welcome a Select Committee inquiry into the management of the programme. It would, I fear, reveal that a profoundly disturbing system was in operation during that time.
Furthermore, although it is true that the specification, the ASR400, was not changed, much of the detailed requirement—filling in the broader terms of those references—was changed. Some change is inevitable. Neither science nor defence stand still. However, the MOD must stand indicted of gross mismanagement, which has now cost my constituents their immediate jobs. My right hon. Friend should now ensure that MOD heads should roll, too. One of the least acceptable facts of British political life is that those civil servants who have been guilty of mismanagement often get off scot-free. Unfortunately, it cannot be said that GEC itself was anything other than a willing partner in this arrangement. The absurd cost-plus basis of defence procurement leads to a cosy relationship which is beneficial at the time but which in the long term is destructive to the interests of both sides.
We reached the crunch point in early 1985 when, I believe, Ministers were starting to think about pulling the plug. My right hon. Friend the Member for Henley (Mr. Heseltine) and his successor, my right hon. Friend the Member for Ayr (Mr. Younger), decided instead to give GEC a further chance and set about developing a competitive framework and a fixed price basis for payment. It is arguable that at this stage the Ministry of Defence was leading GEC up the garden path.
I shall now turn to a review of progress since the end of March. The new competitive framework has justified itself. GEC was left to its own devices, but with the chill winds of competition blowing, minds at long last became concentrated. By September, progress had certainly been made, but in his statement my right hon. Friend makes it clear that the customer, the RAF, even at that time did not feel that it was good enough. We have learned directly or indirectly that on all major criteria—range, tracking, computer power and filtering—performance was below par. That is not in dispute. GEC argued that the performance was quite close to specification but the RAF argued that it was a long way off. There is some common ground, probably more than appears, because the two sides are measuring things in different ways. It was not the performance that persuaded my right hon. Friend but the expectation, since he had to be mindful of the importance of getting the equipment into use early.
I should now like to turn to my right hon. Friend's comments after the test flight. He and my noble Friend the Minister of State for Defence Procurement say that although the system works in the lay sense of the word, it does not work in the sense of being up to scratch. I hope that my right hon. Friend will agree that even with the best will in the world his public comment on television aroused quite false optimism in GEC. Ministers now say that there were frequent breakdowns in the system and that often, equipment which worked on take-off did not work on


landing, and that on that basis they had no confidence in the consistency of the equipment and, therefore, its capacity for early retirement. With hindsight they should surely have sounded a warning note.
A factor in the decision thus faced by the Cabinet appears to be that delay in the supply of the AEW meant that we would not be able to plug our defence gap. AWACS was far from ideal, but it was working and available. Nimrod was crude. All hon. Members will understand that the Cabinet faced a difficult choice and the RAF took the view that enough was enough. I am sure that most of my hon. Friends will agree that one cannot overrule the RAF on a matter of confidence in the equipment that it has to use.
My hon. Friends representing Hertfordshire constituencies are especially disappointed at what happened in the closing days of this tale. Although there is a history of poor project management, enough changes had been made to prompt me vigorously to argue for an extension, at least until March. Unfortunately, quite apart from the growing impatience and scepticism of the RAF, my right hon. Friend the Member for Waveney (Mr. Prior) decided to weigh in with an outspoken attack on the evaluation system. That was profoundly unhelpful and caused the die to be cast. Rightly or wrongly, the RAF had made up its mind and the Cabinet backed the unanimous choice of its scientific advisers. Given those facts it would be a mistake to prolong the agony.

Mr. Prior: Why on earth should my hon. Friend think that a statement I made last Sunday had a damaging effect on getting an extension of a few weeks or a couple of months for the assessment? His remarks are not what I would expect from my hon. Friend, and if it is any help to him I can tell him now that GEC offered to pay to the middle of January so that a further assessment could be made.

Mr. Jones: I am grateful to my right hon. Friend for that intervention. One of the consequences of the information that came out over the weekend was not only damage to the reputation of this piece of equipment and to the chances of continuing with work on it, but also damage to the credibility of GEC on a number of other fronts in which I have a constituency interest and an interest in another sense.
We have spent a great deal of time squabbling about what caused the problem in the past. Surely now we can at least spare a few words for the future. GEC has a great record in many ways and it has brought a great many other products to fruition which are selling well in the world. I hope that when my hon. Friend the Minister replies he will be able to say something about the alternative forms of radar system which it may be possible to develop over the coming years and that that will give hope to this sector of the economy, because that is what is needed.

Mr. Kevin McNamara: We have had a remarkable debate this evening, but the most remarkable speech of all was that which came from the right hon. Member for Waveney (Mr. Prior). Basically, he rubbished the whole of the Government's case. There is a duty upon the Minister when he replies to answer point by point, in detail, the questions that were raised by the right hon. Gentleman on cost, because that is fundamental to the case that was given.
Secondly, there is a real duty upon the Minister to justify why, even at this late stage, we cannot have an independent assessment. An extra few weeks, at GEC's cost, would be nothing to settle that matter. It is not as though independent assessors have not been used before. They were brought in last year by the Minister to work out technical details with the Department at Malvern. There was a suggestion within the Minister's Department that that should be done again this year.
There was a suggestion, as late as October, as reported in The Guardian this weekend, that CAP (Scientific), which helped to carry out the inquiry last year, should be brought in again. That was suggested by the risk assessment committee. The Guardian reports:
The ministry's 'risk assessment' committee—the group charged with assessing Nimrod's ability to meet the RAF's cardinal points specification—had already approached the British computer specialists CAP (Scientific) and two American radar specialists when it was instructed by another section of the ministry, probably the Procurement Executive, to drop the idea.
Therefore, the risk assessment committee wanted that additional support for its judgment, or its criticism for that judgment, and the Government were not prepared to give it or even to think about it.

Dr. Hampson: Will the hon. Gentleman give way?

Mr. McNamara: No. With the greatest respect to the hon. Gentleman, I have surrendered a lot of my time so that everybody could speak, and if I give way once I shall have to do so again.
If the people who carried out that technical assessment felt that they needed it, one cannot but come to the conclusion that there has been that degree of hostility to Nimrod in the Ministry since 1977 such that it was not prepared at any time or any occasion to think again.
But the decision on the contract, as the right hon. Member for Waveney pointed out, despite his tremendous defence of his company on television earlier this evening, has meant that we have told the world that, in one of the most sensitive areas of high technology and defence, Britain cannot make it. That is what we have said and that is what the Government are doing to British industry. They are saying that Britain cannot make it.
Last year the Government threw away our helicopter technology. Last Christmas there was one present—Westland helicopter technology to the United States. This Christmas there is another—early warning technology to the United States. I wonder, if the Prime Minister delays her election until 1988, what she will give them next year.
The Government say that this is not a strategically vital industry and that Westland was not a strategically vital industry. None of them are strategically vital industries, but if they are all given away together there will be no industry. That is what the Government are doing in our important defence base. There is no way that that can be justified.
The only thing that the Government are prepared to proceed with is the defence of a decision to purchase a nuclear warhead and develop that in Britain. But airborne early warning is far more fundamental to Britain's defence than any Trident system. The problem is that the Government, the Prime Minister and the Ministry of Defence are just a lot of nuclear junkies. They are hooked on Trident and everything else in our conventional defence suffers as a result. Airborne early warning, frigates and the


Army all go because of the attitude of the right hon. Gentleman the Secretary of State and his right hon. Friends.
We then turn to the argument of offset. The Secretary of State said that Boeing is an honourable company. He promised that it will meet its offset commitments—£130 for every £100. That seems too good to be true until we examine it. The Minister has said that Boeing will be contractually committed, but, in fact, it is committed to nothing by contract, not one job. The Minister did not say whether the non-binding contract is to last beyond the delivery of aircraft or whether it will go on during the life of the aircraft. Can he tell us that? Does it cover spares and replacements or does it end with the delivery?
On top of that, we are told that Boeing always honours its commitments. We should ask the Saudis how they felt when they were promised great things from Boeing. They were promised great offsets for their purchases. They were offered nine tremendous schemes: aerospace maintenance, advanced electronics centres, computer systems, digital telecommunications, a facility for manufacturing Boeing Vertol, a power engineering centre, an applied biotechnology centre and an applied technology centre. Of all those schemes, only two, the cheapest, have got off the ground. That is the truth about Boeing at present and the way in which it honours its commitments. As my hon. Friend the Member for Linlithgow (Mr. Dalyell) pointed out, since the Glenn amendment there will be very little chance of those things coming through.
I next want to come to the comments of the right hon. Member for Old Bexley and Sidcup (Mr. Heath). The Prime Minister said in reply to my right hon. Friend the Member for Llanelli (Mr. Davies) earlier this week that it is the opinion of the RAF, the people who are responsible for the defence of our country, that counts. Does the Minister believe that? Does he believe that it is the opinion of the generals that matter and that it is only they who will press the button? That is what the Government are saying.

Mr. Geoffrey Dickens: rose—

Mr. NcNamara: Are the Government abrogating the whole of their political responsibility? We know that it is not true. We know that the Government have made political decisions time and time again over defence contracts and this is nothing but a political decision on which £50 million was spent to buy time, as the right hon. Member for Waveney said.
The hon. Member for Hertfordshire, West (Mr. Jones) said that it is civil servants who are to blame on this contract. We can all blame civil servants. Nobody loves them, everybody hates them. However, this contract has gone on for nine years. For two of those years there was a Labour Government and we bear our share of the responsibility. However, for seven years we have had a Tory Government in control. It has gone on for seven years under four Secretaries of State—the right hon. Member for Cambridgeshire, South-East (Mr. Pym), Sir John Nott, the right hon. Member for Henley (Mr. Heseltine) and now the right hon. Member for Ayr (Mr. Younger). They were all responsible for what is going on. They knew that when Tornado was introduced we would need an airborne early warning system to make it work effectively and properly. In spite of that, they were not

prepared to cancel Nimrod or to put the impetus behind it to ensure that it was available when Tornado came on stream. Therefore, when we have our first squadron of Tornado interceptors next year they will be crippled because over the past seven years not one Tory Secretary of State has been prepared to grasp the nettle of airborne early warning and make sure that the RAF has the use of the potential of that system. Now they are doing it at twice the expense—[Interruption.] Yes, Conservative Members do well to cheer. The Government are reacting too late. There has been vulnerability and it will remain for another five or six years. There was no reason why we should not have gone ahead with Nimrod and ironed out the problems that existed.
The Government have announced today the selling out of British jobs, of British technology and of British exports. More importantly, they have left a grave area of vulnerability in our air defences over the past seven years. For that reason rather than all the others, the Opposition will divide the House.

The Parliamentary Under-Secretary of State for Defence Procurement (Mr. Archie Hamilton): The Government have been accused of many things tonight, and among the most ludicrous of the accusations is that we are reluctant to buy British. As my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) said, the British solution would be popular. My hon. Friend the Member for Hertfordshire, West (Mr. Jones) said that he believed that the Government would buy British if that were viable. Most of our equipment budget is spent in the United Kingdom, and the GEC group of companies has about £1·8 billion-worth of MOD business on its books, excluding Nimrod.
The House knows also that the British taxpayer has spent about £660 million in cash—worth £930 million in today's money—on Nimrod. Nothing could demonstrate more clearly the commitment of Ministers, MOD officials and the Royal Air Force to ensure that the GEC AEW succeeded and that we could buy British.
It gave my right hon. Friend the Secretary of State no pleasure, and it gives me none, to have to tell the House that, despite this commitment, and despite the expenditure of these large sums, Nimrod does not at present meet the specification required by the RAF, and we have no confidence that it will do so within the time scale laid down.
I do not need to remind the House that the Soviet threat is ever-present and increasing. My hon. Friend the Member for Ruislip-Northwood, (Mr. Wilkinson) recognises this as well as anyone. Despite its economic weakness, the Soviet Union has created as fearsome a fighting machine as the world has ever known, and one that far exceeds its legitimate requirements for defence. It used to be said that although the Soviet Union had greatly superior numbers in troops, tanks, aircraft and many other armaments, the West had a commanding superiority in technology. This is becoming less and less true every day. For example, it is highly likely that the Soviet Union will soon be able to deploy a new generation of cruise missiles that will fly faster and be much more difficult—[Interruption.]

Mr. Speaker: Order. Many questions have been raised in the debate and the Minister is answering them.

Mr. Hamilton: Thank you, Mr. Speaker. I was saying that the Soviet Union will soon be able to deploy a new generation of cruise missiles that will fly faster and be much more difficult to identify than any that can be deployed by either side today. That is why the need for a new look-down AEW system, which was endorsed by Ministers in 1977, is becoming daily more essential for our defence capability.
As my right hon. Friend the Secretary of State told the House earlier today, AWACS meets, or comes close to meeting, the operational standards set in 1977, and the Nimrod AEW, regrettably, does not. Nor is it likely to do so within the required time scale. Indeed, in several respects AWACS significantly exceeds our requirements and so gives us confidence that it will be able to deal with the sort of threat that we anticipate in coming years.
I can assure my hon. Friend the Member for Ruislip-Northwood that we shall fit the CFM56 engine in the E3A. I am confident that the engine will achieve a higher performance.
GEC has made progress in recent months—I fully acknowledge this—in producing a clearer picture, but we found that the system was seeing rather less than 50 per cent. of available targets at any one time. I disagree with my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath): it has not solved all the problems. In addition, its radar detection range was significantly down. False tracks were still appearing and mean track life was less than half of that required.

Mr. Heath: I did not say that it solved all the problems. I said that it had made remarkable progress in nine months. From the company's point of view and the expert advice it has, it will be able to deal with the rest of the problems, certainly as far as AWACS are concerned, in the time schedule.

Mr. Hamilton: The problem has been that it has made advances in some areas and difficulties have cropped up in others. As the House can readily see, the difference is not marginal. Measured against ASR400, the gap in performance of the two systems is wide. My right hon. Friend the Member for Pavilion alluded to that.
GEC says that it never undertook to have a perfect working system at this time and that it has every confidence that it will be able to produce a system that will approach the required standard in three years. That is the company's view, but it is not supported by the judgment of the Ministry of Defence technicians, and their judgment is unanimous. I do not think that the hon. Member for Linlithgow (Mr. Dalyell) will have the satisfaction of seeing these people crawl out from the woodwork in years to come.
I am glad to see the hon. Member for Orkney and Shetland (Mr. Wallace) represent the alliance all on his own. He was very kind and praised my right hon. Friend for his courage in taking this decision. I thank him for that, but I hope that he will not mind me saying how much I regret that there is a horrible rumour going around that the alliance will show its courage tonight by abstaining.
My right hon. Friend the Member for Waveney (Mr. Prior) and the hon. Member for Linlithgow referred to the 3,845 modifications that have taken place on the Nimrod programme since 1979. Perhaps I should explain to the House what a modification is. Each and every change that has been proved necessary to make the equipment during

its development programme is called a modification. So the figure of 3,845 is a measure of the complexity of the process of trial and error that is inevitably characteristic of the development programme. Needless to say, it is not a sign that the customer's requirement has changed. My right hon. Friend the Secretary of State has made it clear that the only change in the requirement has been the addition of in-flight refuelling.
I now refer to the accusation that we have moved the goalposts, that we have altered the specification and so made GEC's task impossible. That has remained completely unchanged with the exception of in-flight refuelling.
Lessons have been learned. I totally agree with my right hon. Friend the Member for Waveney who said that he hoped there will be no more cost-plus contracts. I agree also with the hon. Member for Orkney and Shetland who said that there were weak contractual arrangements. That is certainly true.

Mr. McNamara: Will the hon. Gentleman give way?

Mr. Hamilton: I have only three minutes left, so I shall not give way.
In general, it is false to ridicule the offset arrangements, as some hon. Members have done. The Americans, and Boeing in particular, have a good record in fulfilling offset commitments of this sort. The offset programme will involve high technology work across a broad range of activities. Past projects have yielded highly successful offsets. The surface and submarine versions of the McDonnell Douglas Harpoon are the most striking. Almost £700 million of contracted work was achieved against a commitment of £300 million. Boeing's agreement for Chinook, negotiated in 1978 with a Labour Government, specified not a binding arrangement, but a "best endeavour" of 30 per cent. It delivered £100 million, and that was well in excess of what was done.
In its recent confused statements on defence policy, the Labour party favoured strong conventional defence. On the first occasion that this new-found commitment is put to the test, when the Government have to take a difficult and expensive decision in the interests of stronger conventional defence, it is found to be as hollow and empty as we have come to expect of every other election promise from the Labour party.
Another extraordinary attitude is the Opposition's hostility to the Royal Air Force. I believe that the RAF's views on defence procurement are very important, but the Opposition carry on like first world war generals regarding it as unnecessary to consult the poor bloody infantry about the conduct of the war. I hope that my right hon. and non. Friends will join me in voting against this measure.

Mr. John McWilliam: On a point of order, Mr. Speaker—

Question put:—

The House divided: Ayes 170, Noes 339.

Division No. 48]
[10 pm


AYES


Adams, Allen (Paisley N)
Bell, Stuart


Anderson, Donald
Benn, Rt Hon Tony


Archer, Rt Hon Peter
Bennett, A. (Dent'n &amp; Red'sh)


Ashley, Rt Hon Jack
Bermingham, Gerald


Ashton, Joe
Bidwell, Sydney


Atkinson, N. (Tottenham)
Blair, Anthony


Barnett, Guy
Boothroyd, Miss Betty


Barron, Kevin
Boyes, Roland


Beckett, Mrs Margaret
Bray, Dr Jeremy






Brown, Gordon (D'f'mline E)
Kinnock, Rt Hon Neil


Brown, N. (N'c'tle-u-Tyne E)
Lambie, David


Brown, R. (N'c'tle-u-Tyne N)
Lamond, James


Brown, Ron (E'burgh, Leith)
Leighton, Ronald


Buchan, Norman
Lewis, Ron (Carlisle)


Caborn, Richard
Lewis, Terence (Worsley)


Callaghan, Jim (Heyw'd &amp; M)
Litherland, Robert


Canavan, Dennis
Lloyd, Tony (Stretford)


Carter-Jones, Lewis
Lofthouse, Geoffrey


Clark, Dr David (S Shields)
Loyden, Edward


Clarke, Thomas
McDonald, Dr Oonagh


Clay, Robert
McKelvey, William


Clelland, David Gordon
MacKenzie, Rt Hon Gregor


Clwyd, Mrs Ann
McNamara, Kevin


Cohen, Harry
McTaggart, Robert


Cook, Frank (Stockton North)
McWilliam, John


Cook, Robin F. (Livingston)
Madden, Max


Corbett, Robin
Marek, Dr John


Corbyn, Jeremy
Martin, Michael


Cox, Thomas (Tooting)
Maxton, John


Craigen, J. M.
Maynard, Miss Joan


Crowther, Stan
Meacher, Michael


Cunliffe, Lawrence
Michie, William


Cunningham, Dr John
Millan, Rt Hon Bruce


Dalyell, Tam
Mitchell, Austin (G't Grimsby)


Davies, Rt Hon Denzil (L'lli)
Morris, Rt Hon A. (W'shawe)


Davies, Ronald (Caerphilly)
Morris, Rt Hon J. (Aberavon)


Davis, Terry (B'ham, H'ge H'l)
Nellist, David


Deakins, Eric
O'Brien, William


Dewar, Donald
O'Neill, Martin


Dixon, Donald
Orme, Rt Hon Stanley


Dobson, Frank
Park, George


Dormand, Jack
Parry, Robert


Douglas, Dick
Patchett, Terry


Dover, Den
Pavitt, Laurie


Duffy, A. E. P.
Pendry, Tom


Dunwoody, Hon Mrs G.
Pike, Peter


Eadie, Alex
Powell, Raymond (Ogmore)


Eastham, Ken
Prescott, John


Edwards, Bob (W'h'mpt'n SE)
Radice, Giles


Evans, John (St. Helens N)
Randall, Stuart


Fatchett, Derek
Raynsford, Nick


Faulds, Andrew
Redmond, Martin


Field, Frank (Birkenhead)
Rees, Rt Hon M. (Leeds S)


Fields, T. (L'pool Broad Gn)
Richardson, Ms Jo


Fisher, Mark
Roberts, Ernest (Hackney N)


Flannery, Martin
Robertson, George


Foot, Rt Hon Michael
Robinson, G. (Coventry NW)


Forrester, John
Rogers, Allan


Foster, Derek
Rooker, J. W.


Foulkes, George
Ross, Ernest (Dundee W)


Fraser, J. (Norwood)
Rowlands, Ted


Freeson, Rt Hon Reginald
Sheerman, Barry


Garrett, W. E.
Sheldon, Rt Hon R.


George, Bruce
Shore, Rt Hon Peter


Godman, Dr Norman
Short, Ms Clare (Ladywood)


Golding, Mrs Llin
Short, Mrs R.(W'hampt'n NE)


Gould, Bryan
Silkin, Rt Hon J.


Hamilton, James (M'well N)
Skinner, Dennis


Hamilton, W. W. (Fife Central)
Smith, Rt Hon J. (M'ds E)


Hardy, Peter
Snape, Peter


Harrison, Rt Hon Walter
Soley, Clive


Hart, Rt Hon Dame Judith
Spearing, Nigel


Hattersley, Rt Hon Roy
Straw, Jack


Healey, Rt Hon Denis
Thomas, Dr R. (Carmarthen)


Heddle, John
Thompson, J. (Wansbeck)


Hogg, N. (C'nauld &amp; Kilsyth)
Wardell, Gareth (Gower)


Holland, Stuart (Vauxhall)
Wareing, Robert


Home Robertson, John
Weetch, Ken


Howarth, George (Knowsley, N)
Welsh, Michael


Howell, Rt Hon D. (S'heath)
Williams, Rt Hon A.


Hoyle, Douglas
Winnick, David


Hughes, Robert (Aberdeen N)
Woodall, Alec


Hughes, Roy (Newport East)
Young, David (Bolton SE)


Hughes, Sean (Knowsley S)



Janner, Hon Greville
Tellers for the Ayes:


John, Brynmor
Mr. Allen McKay and


Jones, Barry (Alyn &amp; Deeside)
Mr. Chris Smith.





NOES


Adley, Robert
Durant, Tony


Aitken, Jonathan
Edwards, Rt Hon N. (P'broke)


Alexander, Richard
Evennett, David


Alison, Rt Hon Michael
Eyre, Sir Reginald


Ancram, Michael
Fallon, Michael


Arnold, Tom
Favell, Anthony


Ashby, David
Fletcher, Alexander


Aspinwall, Jack
Fookes, Miss Janet


Atkins, Rt Hon Sir H.
Forman, Nigel


Atkins, Robert (South Ribble)
Forsyth, Michael (Stirling)


Atkinson, David (B'm'th E)
Forth, Eric


Baker, Rt Hon K. (Mole Vall'y)
Fowler, Rt Hon Norman


Baker, Nicholas (Dorset N)
Fox, Sir Marcus


Baldry, Tony
Franks, Cecil


Banks, Robert (Harrogate)
Freeman, Roger


Batiste, Spencer
Fry, Peter


Bellingham, Henry
Gale, Roger


Bendall, Vivian
Galley, Roy


Bennett, Rt Hon Sir Frederic
Gardiner, George (Reigate)


Benyon, William
Gardner, Sir Edward (Fylde)


Best, Keith
Glyn, Dr Alan


Biffen, Rt Hon John
Goodhart, Sir Philip


Biggs-Davison, Sir John
Goodlad, Alastair


Blackburn, John
Gorst, John


Blaker, Rt Hon Sir Peter
Gow, Ian


Body, Sir Richard
Grant, Sir Anthony


Bonsor, Sir Nicholas
Greenway, Harry


Bottomley, Peter
Gregory, Conal


Bottomley, Mrs Virginia
Griffiths, Sir Eldon


Bowden, A. (Brighton K'to'n)
Griffiths, Peter (Portsm'th N)


Bowden, Gerald (Dulwich)
Grist, Ian


Boyson, Dr Rhodes
Ground, Patrick


Braine, Rt Hon Sir Bernard
Grylls, Michael


Brandon-Bravo, Martin
Gummer, Rt Hon John S


Bright, Graham
Hamilton, Hon A. (Epsom)


Brinton, Tim
Hamilton, Neil (Tatton)


Brittan, Rt Hon Leon
Hanley, Jeremy


Brooke, Hon Peter
Hannam, John


Brown, M. (Brigg &amp; Cl'thpes)
Hargreaves, Kenneth


Bruinvels, Peter
Harris, David


Bryan, Sir Paul
Harvey, Robert


Buchanan-Smith, Rt Hon A.
Haselhurst, Alan


Buck, Sir Antony
Havers, Rt Hon Sir Michael


Budgen, Nick
Hawkins, C. (High Peak)


Bulmer, Esmond
Hawkins, Sir Paul (N'folk SW)


Burt, Alistair
Hayes, J.


Butcher, John
Hayhoe, Rt Hon Barney


Butler, Rt Hon Sir Adam
Hayward, Robert


Butterfill, John
Heathcoat-Amory, David


Carlisle, John (Luton N)
Heddle, John


Carlisle, Kenneth (Lincoln)
Henderson, Barry


Cash, William
Heseltine, Rt Hon Michael


Chalker, Mrs Lynda
Hickmet, Richard


Channon, Rt Hon Paul
Hicks, Robert


Chapman, Sydney
Higgins, Rt Hon Terence L.


Chope, Christopher
Hill, James


Clark, Hon A. (Plym'th S'n)
Hind, Kenneth


Clark, Dr Michael (Rochford)
Hirst, Michael


Clark, Sir W. (Croydon S)
Hogg, Hon Douglas (Gr'th'm)


Clarke, Rt Hon K. (Rushcliffe)
Holland, Sir Philip (Gedling)


Cockeram, Eric
Holt, Richard


Colvin, Michael
Hordern, Sir Peter


Conway, Derek
Howard, Michael


Coombs, Simon
Howarth, Alan (Stratf'd-on-A)


Cope, John
Howarth, Gerald (Cannock)


Cormack, Patrick
Howe, Rt Hon Sir Geoffrey


Corrie, John
Howell, Rt Hon D. (G'ldford)


Couchman, James
Howell, Ralph (Norfolk, N)


Cranborne, Viscount
Hubbard-Miles, Peter


Critchley, Julian
Hunt, David (Wirral W)


Crouch, David
Hunt, John (Ravensbourne)


Currie, Mrs Edwina
Hunter, Andrew


Dickens, Geoffrey
Hurd, Rt Hon Douglas


Dicks, Terry
Jackson, Robert


Dorrell, Stephen
Jenkin, Rt Hon Patrick


Douglas-Hamilton, Lord J.
Jessel, Toby


Dover, Den
Johnson Smith, Sir Geoffrey


du Cann, Rt Hon Sir Edward
Jones, Gwilym (Cardiff N)


Dunn, Robert
Jones, Robert (Herts W)






Jopling, Rt Hon Michael
Merchant, Piers


Joseph, Rt Hon Sir Keith
Meyer, Sir Anthony


Kellett-Bowman, Mrs Elaine
Miller, Hal (B'grove)


Kershaw, Sir Anthony
Mills, Iain (Meriden)


Key, Robert
Miscampbell, Norman


King, Rt Hon Tom
Mitchell, David (Hants NW)


Knight, Greg (Derby N)
Moate, Roger


Knight, Dame Jill (Edgbaston)
Monro, Sir Hector


Knowles, Michael
Montgomery, Sir Fergus


Lamont, Rt Hon Norman
Moore, Rt Hon John


Lang, Ian
Morrison, Hon P. (Chester)


Latham, Michael
Moynihan, Hon C.


Lawler, Geoffrey
Murphy, Christopher


Lawrence, Ivan
Neale, Gerrard


Lawson, Rt Hon Nigel
Needham, Richard


Lee, John (Pendle)
Nelson, Anthony


Leigh, Edward (Gainsbor'gh)
Neubert, Michael


Lennox-Boyd, Hon Mark
Newton, Tony


Lewis, Sir Kenneth (Stamf'd)
Nicholls, Patrick


Lightbown, David
Normanton, Tom


Lilley, Peter
Norris, Steven


Lloyd, Sir Ian (Havant)
Onslow, Cranley


Lloyd, Peter (Fareham)
Oppenheim, Phillip


Lord, Michael
Oppenheim, Rt Hon Mrs S.


Luce, Rt Hon Richard
Osborn, Sir John


Lyell, Nicholas
Ottaway, Richard


McCurley, Mrs Anna
Page, Sir John (Harrow W)


Macfarlane, Neil
Page, Richard (Herts SW)


MacGregor, Rt Hon John
Patten, Christopher (Bath)


MacKay, Andrew (Berkshire)
Patten, J. (Oxf W &amp; Abgdn)


MacKay, John (Argyll &amp; Bute)
Pattie, Geoffrey


Maclean, David John
Pawsey, James


McLoughlin, Patrick
Peacock, Mrs Elizabeth


McNair-Wilson, M. (N'bury)
Percival, Rt Hon Sir Ian


McNair-Wilson, P. (New F'st)
Pollock, Alexander


McQuarrie, Albert
Porter, Barry


Major, John
Portillo, Michael


Malins, Humfrey
Powell, William (Corby)


Malone, Gerald
Powley, John


Maples, John
Price, Sir David


Marlow, Antony
Proctor, K. Harvey


Marshall, Michael (Arundel)
Pym, Rt Hon Francis


Mates, Michael
Raffan, Keith


Mather, Carol
Raison, Rt Hon Timothy


Maude, Hon Francis
Rathbone, Tim


Mawhinney, Dr Brian
Rees, Rt Hon Peter (Dover)


Maxwell-Hyslop, Robin
Rhodes James, Robert


Mellor, David
Rhys Williams, Sir Brandon





Ridley, Rt Hon Nicholas
Terlezki, Stefan


Ridsdale, Sir Julian
Thatcher, Rt Hon Mrs M.


Rifkind, Rt Hon Malcolm
Thomas, Rt Hon Peter


Rippon, Rt Hon Geoffrey
Thompson, Donald (Calder V)


Roberts, Wyn (Conwy)
Thompson, Patrick (N'ich N)


Robinson, Mark (N'port W)
Thorne, Neil (Ilford S)


Roe, Mrs Marion
Thornton, Malcolm


Rossi, Sir Hugh
Thurnham, Peter


Rost, Peter
Townend, John (Bridlington)


Rumbold, Mrs Angela
Townsend, Cyril D. (B'heath)


Sackville, Hon Thomas
Tracey, Richard


Sainsbury, Hon Timothy
Trippier, David


St. John-Stevas, Rt Hon N.
Trotter, Neville


Sayeed, Jonathan
Twinn, Dr Ian


Shaw, Giles (Pudsey)
Van Straubenzee, Sir W.


Shaw, Sir Michael (Scarb')
Vaughan, Sir Gerard


Shelton, William (Streatham)
Viggers, Peter


Shepherd, Colin (Hereford)
Waddington, David


Shepherd, Richard (Aldridge)
Wakeham, Rt Hon John


Shersby, Michael
Waldegrave, Hon William


Silvester, Fred
Walden, George


Sims, Roger
Wall, Sir Patrick


Smith, Sir Dudley (Warwick)
Waller, Gary


Smith, Tim (Beaconsfield)
Walters, Dennis


Soames, Hon Nicholas
Ward, John


Speed, Keith
Wardle, C. (Bexhill)


Speller, Tony
Watson, John


Spicer, Jim (Dorset W)
Watts, John


Spicer, Michael (S Worcs)
Wells, Sir John (Maidstone)


Squire, Robin
Wheeler, John


Stanbrook, Ivor
Whitfield, John


Stanley, Rt Hon John
Whitney, Raymond


Steen, Anthony
Wiggin, Jerry


Stern, Michael
Wilkinson, John


Stevens, Lewis (Nuneaton)
Wolfson, Mark


Stewart, Allan (Eastwood)
Wood, Timothy


Stewart, Andrew (Sherwood)
Woodcock, Michael


Stewart, Ian (Hertf'dshire N)
Yeo, Tim


Stradling Thomas, Sir John
Young, Sir George (Acton)


Sumberg, David
Younger, Rt Hon George


Tapsell, Sir Peter



Taylor, John (Solihull)
Tellers for the Noes:


Taylor, Teddy (S'end E)
Mr. Robert Boscawen and Mr. Tristan Garel-Jones.


Tebbit, Rt Hon Norman



Temple-Morris, Peter

Question accordingly negatived.

Social Security

Postponed proceedings on Question,
That the draft Social Security Benefits Up-rating (No. 2) Order 1986, which was laid before this House on 1st December, be approved.

resumed.

Question again proposed.

Sir Brandon Rhys Williams: I am grateful to you, Mr. Speaker, for allowing me to resume my speech—[Interruption.]

Mr. Speaker: Order. Will hon. Members who are not remaining for this debate please leave quietly?

Sir Brandon Rhys Williams: Before the House moved on to other business, I was explaining why, in my opinion, our reliance on selectivity has ended in failure. I gave three reasons. The first is because it goes against the spirit of the age: it is wrong that we should divide the nation into first class and second class citizens. Secondly, it is contrary to the Government's central precepts by which we try to encourage our citizens to work and save. If we have some 14 million people dependent on means-tested benefits, they are people who have no particular reason to save and not too much reason to work. Finally, it has ended in failure because the system is leading rapidly to administrative breakdown.
This week the London Citizens Advice Bureaux have produced a report which is comprehensive and extremely compelling reading. I hope that my right hon. and hon. Friends in the Department of Health and Social Security will look extremely carefully at its findings. I think it would be true to say that hon. Members who represent London know that what is written in the report is unfortunately all too true.
What the report describes is the chaos of the administrative system under which we handle the supplementary benefits and the case work and personal interviews involved. I have often brought the attention of the House to the fact that in the administration of supplementary benefit and national insurance the staff of the departments are required to make more than 90 million manual entries every week.
The report of the bureaux, with telling photographs, shows the type of premises in which the face-to-face interviews must take place. It draws attention to the staff shortages and the difficulty of giving people adequate training to handle the enormously complex system upon which we rely to make selectivity work. It draws attention to the number of mistakes that are made, inevitably, in interpreting the rules. It shows the tragic amount of waiting time and the inhuman conditions in which people are obliged to take their turn for an interview in order to make their claim.
One of the compelling reasons why we must hasten to abandon our reliance on selectivity is the enormous adminstrative cost and the amount of time which dedicated officials have to give to produce the results, which can give no satisfaction to them or to the claimants.
The system is intended to relieve need in a human way, but in fact it is creating intense hardship, bitterness, uncertainty and delay. No wonder that we find that a rapidly growing area of crime is crimes of violence against staff in the offices of the DHSS.

Dr. Norman A. Godman: Surely one of the most important skills that has to be developed is that of interviewing the clients. This is where training is not as good as it ought to be. I am sure that the hon. Gentleman will agree that it is essential that these interviewing skills are of the highest order.

Sir Brandon Rhys Williams: I might be disposed to accept the hon. Gentleman's opinion if it were not for the fact that, from my observation, the system has to be changed radically. We cannot continue to run the welfare state to provide a basic income guarantee founded on face-to-face interviews for millions of claimants.
However much effort we divert into training of staff, the system has proved itself to be unacceptable and unworkable. We must move away from the reliance on selectivity that is dividing the nation and producing, as I have said before, a sub-culture of people in our society—a large element of the nation—for whom the impulse to save and work is being rapidly undermined.
When looking at what the House is trying to do when uprating these orders and keeping the machinery going while it slowly sinks into the mud, we should ask ourselves, "Could we place more reliance on the insurance principle, and could national insurance be revived?" In an earlier intervention, it was pointed out that national insurance benefits are not enough. That is one of the reasons why we have such a large number of claimants who need to apply for supplementary benefit. Their national insurance contributions have not procured them a benefit which is enough for them to rely on; so they have to apply for additional benefits.
National insurance was from its inception under the difficulty that it needed a Government subsidy, and the Government subsidy appears once again in these orders, although it is being reduced quite arbitrarily from one percentage figure to another. I do not think that there is any rational explanation for why the Treasury contribution to the national insurance fund was what it was last year or is what it will be next year. The whole conception of national insurance has cracked, because the money that can be produced by flat rate contributions is not large enough. When, some 10 years ago, we went over to earnings-related contributions, we said goodbye to the insurance principle in any actuarial sense.
We have produced a system in which the yield of the income tax has to subsidise the welfare state. For some reason best known to the Treasury, it insists on clinging to the idea that people's national insurance contribution and their income tax contribution are completely separate and that what one pays in income tax goes into one fund and what one pays in national insurance contributions and what the employer pays in national insurance contributions goes into a completely different fund. I suggest that that administrative nonsense should end.
National insurance has become a sham. It would be far better to recognise that we are running a system which, in effect, is taking from each according to his capacity and giving to each according to his need. It might be said that that is a growing-up of the whole conception of national insurance and putting in its place gradually, and perhaps half consciously, a life-cycle system of obligation and entitlement. People draw benefit at the beginning of their lives when they are not able to make a contribution; they make their contributions while they are of working age; and they revert to the status of claimants on retirement


and take their money back. I am attracted by the idea of the life-cycle of contribution and entitlement, and I believe that we want to build on it.
Looking at it from the administrative point of view, one of the axioms that my right hon. and hon. Friends must obey is the need to eliminate personal casework in very large quantities and quickly. If they do not accept that, let them consult the offices of the DHSS which are facing the problem of the monumental volumes of casework which they have to do at the moment. I consider that we should find large categories of claimants who can be handled by computer, week in, week out, without their situations being deemed to be continuously changing and needing to be reassessed. Child benefit is an example that we ought to follow when dealing with pensioners and other large categories of people.
I hope that, before next year when we consider orders such as these yet again, the Government will commit themselves to a wholly new approach. I think that we want similtaneous reform of income tax payments and allowances; national insurance contributions and benefits; housing allowances, subsidies and reliefs of every kind; and supplementary benefit. The whole system of redistribution of income in this country needs to be put on to a modern footing which is socially sound and administratively effective.
I should like to make this recommendation. We should move to a computer-based basic income guarantee which is as simple as it can possibly be, based on universal benefits and a universal requirement to contribute from income. It should be introduced in the first instance on a revenue-neutral basis. I would like to increase child benefit substantially, at least for the under-fives.
Apart from that, I am not suggesting major changes in the amount of the individual family's spending power from what they have at the moment. If we were to introduce a system of the kind I am recommending, it would constitute something which every family would be able to rely upon, whether in work or not—about half the equivalent of supplementary benefit rates at the present time.
This, I suggest, would be an extremely liberating process because it would then be up to the claimants themselves to select whether they really needed supplementary benefit or whether they could manage without. Those who had the spirit and the independence to take part-time work or to manage for a time on their savings or to make other arrangements to carry on from week to week would not need to go through the humiliation and the misery of claiming supplementary benefit. They would be people who could rely on their own resources and initiative, and would be free to act like other first class citizens to maintain themselves as best they could be their earnings or by whatever means they chose. There would be no hardship to the people who felt it necessary to apply for supplementary benefit because they would be perfectly entitled, as they are now, to say that they needed the other half of their benefit, which would be reliant on individual case work. I do not know how many people, if they were offered half supplementary benefit without any means test or question, would opt to claim the balance and how many of them would be content with the half benefit. But of course there would be a substantial saving if one is looking at it purely from the point of view of Exchequer outgoings. If there were 100,000 or 500,000 claimants who decided to opt not to insist on claiming the balance, it

would allow us to improve their benefits as time went by, or to make other dispositions in the balance of obligation and entitlement that I have spoken of.
I beg my right hon. and hon. Friends to realise that we cannot go on as we are. There has got to be fresh thinking, and this is the type of approach which is in line with public expectations.
It is also practical in terms of computer technology. I hope that this idea will be considered. It is a way of restoring to people an incentive, an encouragement to work and to save, giving them back their self-reliance and taking the terrible burden of casework off the staff of the DHSS.

Mrs. Elizabeth Shields: I shall refer briefly to two of the instruments in particular. First, I shall mention child benefit. The alliance certainly welcomes the increase of 15p in child benefit, but there is no real reason to congratulate the Government because that sum fails to make good the 1985 cut. That would require a 15p increase.
Such an increase has been supported by many different people inside and outside Parliament since the child poverty figures issued by the Child Poverty Action Group show how the fiscal system has during the past 25 years tended to move against families with children.
It is a fact that DHSS figures show that in 1983 400,000 children lived below supplementary benefit level and nearly 4 million lived on an income of up to only 40 per cent. above the supplementary benefit level. Yet child benefit is a much more cost effective way of helping those families where the head of the family is in work than making cuts in direct taxes, especially for the 250,000 working families with children whose incomes are below the tax threshold. It is also more effective than family income supplement which reaches only half of those eligible and which aggravates the poverty trap.
The Secretary of State said earlier this autumn that child benefit is a
good, sensible way of bringing help to families.
I agree with that, but the Minister does not really demonstrate his fondness for child benefit. Action, as we all know, speaks louder than words. Child benefit is worth less today than the combined value of family allowances and child tax allowances were in 1955. In the case of the second and subsequent children it is £2·70 less.
Secondly, £200 million has been cut from the housing benefit scheme since its introduction and the present housing benefit uprating marks two further cuts amounting to a total of £68 million. The rent rebate taper which is the difference between the needs allowance and the income of a family has been increased from about 17 per cent. or 21 per cent. to 29 per cent. and now stands at 33 per cent. There could be even higher tapers under the 1986 Act, thus decreasing the housing benefit yet again.
The Secretary of State for Social Services says that the average losses will be small, but averages must conceal much greater losses for some people. The Child Poverty Action Group has calculated that a couple with two children earning £110 gross, in receipt of family income supplement and housing benefit, and paying average rent and rates will lose £1·47 a week. The Minister knows that people claiming housing benefit can ill afford to lose this money, or any similar sum.
There are allied problems, such as those concerning students, with the cuts in housing benefit. Because of the shortage of accommodation in the areas around a university or college campus, students are frequently asked to pay rent during the long summer vacation to retain a specific flat or room in the following year. Only discretionary housing benefit is payable under these circumstances, and the burden then falls on parents, many of whom are simply unable to cope with the amounts demanded for the 10 or 12 weeks of the long vacation. When the provisions of the Social Security Act 1986 come into effect, even this discretionary allowance will no longer

be available. Lack of support for students in this position could result in the abandonment of courses, and the loss of talent to the community.
The hon. Member for Teignbridge (Mr. Nicholls) is no longer here, but he earlier made some remarks about alliance policies. We believe that the Government, any Government, have a basic duty to care for the weakest and most vulnerable in our society. Pensioners, the unemployed and those on a fixed income come into this category. As the alliance is fully aware of the fiscal implications of policy, we would look at the needs of the hardest hit today before giving away tax cuts that mainly benefit those in employment or in a sound financial position. We would prefer to see an improvement in both child and housing benefits instead.

Mr. Nick Raynsford: I shall address simply the housing benefit uprating and concentrate on the changes in regulations, which come at the end of a long, sad story of cuts in housing benefit over the past four years since the DHSS took over responsibility for the benefit from the Department of the Environment. The story bears repeating briefly.
In 1981, the Government published a consultation paper, called "Assistance with Housing Costs", and proposed a new reform of the system for helping people to meet their housing costs. They proposed the amalgamation of assistance under supplementary benefit and the old rent rebate and allowance and rate rebate schemes. The argument advanced by the Government was that this would create a more fair and simple system that would be better for claimants and easier to administrate.
The reality—although Conservative Members will not like this—was described in a newspaper not known to be sympathetic towards the Labour party as the greatest administrative fiasco in the history of the welfare state. When the Government tried to introduce a reform supposedly making benefits fairer to claimants and simpler to understand and administer, there were vast, long delays and people waited days, weeks, months for benefit. People were evicted from their homes because they had not got the benefit, there were massive complications and failure to calculate benefit entitlement because it was hugely complex, very unsatisfactory and entirely deserved the epithet given to it by the newspaper that I have quoted.
One might think that a Government who were responsible for such disgraceful bungling, which caused a great deal of hardship to poor people, might adopt a little humility in their approach towards the administration of this benefit system. They might have accepted that they have failed rather dramatically to deliver a decent, fair service to people in need, and accept a case for reform based on the principles that they were advised at the time they should have adopted in 1981, but did not. Those principles were a genuinely simpler system without cuts penalising claimants, ensuring that the people were given an adequate level of support to enable them to meet their housing costs.
The Government might also ponder the fact that the housing benefit scheme became more important, and therefore more expensive, partly because the Department of the Environment was pursuing a policy that deliberately increased the rents that were paid by both council tenants and private tenants. The withdrawal of subsidy forced up rents in the public sector and also encouraged rent officers to fix higher rents in the private sector. Therefore, tenants were paying higher rents. Government Ministers and the Department of the Environment justified the increase on the grounds that means-tested benefits would be available for poorer people so that they did not suffer loss.
What was the response of the Department of Health and Social Security? Again and again Ministers have said that the expenditure on housing benefit has been increasing too fast and that it must be cut. That is gross hypocrisy. The Government have deliberately cut the Department of the Environment's expenditure by forcing up rents and have justified it on the ground that there will be means-tested benefits to protect poorer people, but

when those means-tested benefits begin to involve extra cost Ministers say that they do not like it and that they will cut the cost.
Since the introduction of housing benefit in 1983, the Government have not had enough humility to admit that they have made a mistake and that they ought to tread more carefully in future. Instead, insensitively and arrogantly, this Government have sought on six occasions since 1983 to cut benefits to those who are dependent upon housing benefit. What a record for this Government. The proposals that we are debating tonight represent the sixth successive cut in housing benefit in the last three years.
The result has been an increase in the tapers for those whose incomes are above the needs allowance. They were 17 per cent. on rent and 6 per cent. on rates in 1982 when the DHSS inherited the scheme. The tapers had run at that level for the previous 10 years while the Department of the Environment administered the scheme. In the last four years those tapers of 17 per cent. and 6 per cent.—a total of 23 per cent.—have been increased, and by next April they will be 33 per cent. on rent and 13 per cent. on rates—a total of 46 per cent. That is exactly twice the level that applied just four years ago.
Benefit is being withdrawn from households at twice the rate at which it was withdrawn previously. It is intensifying the poverty trap. It means that for many families on low incomes every additional pound that they earn will be almost completely swallowed up through the withdrawal of tax, national insurance and housing benefit.
The poverty trap problem is clearly illustrated by the comparison with 1979, the last year of the previous Labour Government. A household paying tax and national insurance and getting housing benefit, rent and rate rebates lost 65p of every pound that was earned. The rate of withdrawal now being introduced by a Government who had the temerity and the extraordinary insensitivity in their social security Green Paper and White Paper to claim that they were reducing the poverty trap means that next April that same household will lose 84p in every additional pound that it earns. Although the rate of tax has been reduced, the loss of benefit for every additional pound that is earned will be so steep that 84p of it will be lost. What a deplorable poverty trap. What a deplorable lack of incentive to poorer people to earn more income.
If that applied to wealthy people, Conservative Members would be clamouring about the appalling rate of taxation that was discouraging initiative and entrepreneurs, but when it applies to poor people they say nothing. They go along with it and accept it. It is a classic case of double standards. What is acceptable for poor people they would deplore if it applied to rich people. That is disgraceful hypocrisy on the part of the Government.
We heard another form of hypocrisy two nights ago during the debate on mortgage support when we were told that the Government had to make cuts in supplementary benefit for poor people getting help with their mortgages because the assistance was too generous in comparison with poorer households in work. Now, two nights later, we see exactly what the Government believe in doing to poorer households in work getting means-tested housing benefit. They will face a faster rate of withdrawal of their housing benefit because the tapers have been increased. That is from the same Government that pleaded the case for greater equity between those in work and those who are unemployed. These regulations will penalise poor families in work. That is gross hypocrisy.
The cuts adopted by the Government over the last four years have weighed heavily on many poorer households. To date, those cuts have come purely through adjustments in the formula by which housing benefit is assessed—the tapers and the non-dependent deductions and so on. But now we are discussing a further change in the assessment, a further cut by the Government. Not content with making the taper steeper and reducing people's benefit by that route, they are also fiddling the formula by which housing benefit is assessed.
That formula is the needs allowance which has been in use for many years. That is a traditional formula designed to reflect the needs of low-income families in work—the group of people about whom, supposedly, the Government are concerned. That needs allowance formula will be adjusted this time, according to the Government. They are no longer prepared to uprate that formula in accordance with the time-honoured tradition. They will no longer take into account people's housing costs, which have always been taken into account in the assessment of the needs allowance.
The formula is an arcane one and I do not propose to go into it. Its key point is that housing costs have always been taken into account, because that was the fair way to reflect the needs of households on low incomes, in work and receiving housing benefit. That has now been dropped and the Government will no longer take account of housing costs. Why is that? Have they put forward an intellectually cogent argument for doing that? Have they said that they have looked at the indexes and have decided that they are no longer valid and need to be reappraised? Not at all. They have simply decided that here there is scope for more cuts, for taking more money away from poor people so that they can satisfy the Treasury that their budget is being cut.
This crude, underhand measure breaks the time honoured tradition of uprating housing benefit. That tradition goes back to a former Conservative Government who, in 1972, introduced the rent rebate scheme. That formula stood the test of time through the 1970s, and the 1980s, but it is now to be ditched by this Government in a crude and underhand way in an attempt to make cuts. What is most disgraceful about it is that when we debated the interim uprating in July the Minister did not take housing costs into account. I wrote to him privately about that and said I was worried that it had not been done.
I am quite open about my correspondence with the Minister and he is free to reply to me. In his reply the Minister said that the Government did not feel it was appropriate to take housing costs into account because this was an uprating in an interim period during which it was impossible to make projections of how housing costs would arise during that period. He said that clearly—the word he used was clearly—the Government would take into account the increase in rent and rates when assessing the following April's uprating. Did they take them into account? The Minister will say that they did, but they simply ignored them and uprated by other factors.

Mr. Major: The hon. Gentleman has put that in writing and I noticed that he fed it to his hon. Friend the Member for Derby, South (Mrs. Beckett) for her speech. From our exchange of correspondence he knows the position well, and I am surprised that he keeps reiterating precisely the

same point. The hon. Gentleman lectures the House about the administrative difficulties of local authorities at the time of the 1983 reforms and thereafter. Does the hon. Gentleman think that it is administratively easier for local authorities to take into account what he calls an arcane formula for needs allowance or the cash changes that we made in July and now? Does he not recall that in July the local authorities were more than content for us to use the formula that we used then and subsequently on this occasion?

Mr. Raynsford: I am pleased to be able to reply to the Minister. On the first point, I shall continue to repeat what I said, because it is true. It is true that in his letter to me in July the Minister said that clearly the Government would take rent and rate increases into account when they came to fix the appropriate needs allowance for next April. Now we come to the reality and the Government have made no allowance for rent and rate increases in fixing that allowance. I am sorry that the Minister led me to believe that one thing was going to happen last July but has now done something very different. He will have to face that fact.
Secondly, on administration, the Minister knows, I hope, having been responsible for the administration of the scheme for some time, that local authorities expect good advance notice from the Government of the precise figures—the appropriate needs allowances. They are then fed into their computers, because the vast majority are computerised. Most local authorities will not delve into the formula that is adopted in the administration of the scheme. I am not talking about their assessment of what is fair to their claimants. They will await the statutory instrument from the Government and put it into practice if they have good advance notice.
The Government's record is shabby. They have frequently given late notice indeed about adjustments in the needs allowance, in the tapers, in the non-dependant deductions—all made to make cuts. Local authorities have had great difficulty in putting the Government's wishes into effect because of the lack of advance notice.
The Minister's pretence that there is any administrative complication in applying a figure set by a Government in a statutory instrument which the local authority then applies as a basis for assessing housing benefit calculations suggests that the Minister has less practical experience about the implications of administering the housing benefit scheme than he should have.
The Government's record on housing benefit is a sad, shabby and shameful one. It is one of which any Government should be ashamed and they should seek to improve the benefit system to claimants rather than make further cuts. Labour Members can only deplore the Government's abominable failure over the past four years to honour the pledges that were set out in the consultation paper, "Assistance with housing costs". We look forward next year to the election of a Government who will care and will administer a proper housing benefit scheme in the interests of poorer people.

Mr. Jeremy Corbyn: It is a curious method of governing that on the day of the royal wedding free school meals were taken away from 500,000 children in Britain and on the penultimate day before the House rises for the Christmas recess the Government are showing


their deep concern for the poor of this country by making them considerably poorer by the measures that they are seeking to push through the House tonight.
If the Government were seriously concerned about eliminating poverty in Britain they would not be putting these measures before us tonight but would be putting forward measures considerably to increase child benefit, not just by the small amount by which it is being increased tonight, and to dramatically improve the housing benefit and statutory sick pay arrangements in Britain.
Quite honestly, the position of Britain's poor is a disgrace and it has become considerably worse in the past seven years. If Conservative Members, who seem anxious to leave this place to go home to their beds, thought about it, they could walk from this House and in 10 minutes they would find several hundred people with no homes to go to, sleeping by Waterloo station and the National theatre. That is the disgrace and that is the issue which the orders do not address one bit. The degree of total homelessness in London now is greater than it has been for many decades.
As hon. Members go home—some of them in chauffeur-driven cars—they will go past people having to sleep on the streets tonight, and it is not very warm out there. Ministers might decide that the simplest thing in the world is to attack local authorities who are attempting to do something about the problems, but the answer lies in their hands. They have chosen to do nothing about it.
I want to raise a couple of issues and I hope that the Minister will have the courtesy to listen to what I have to say and possibly, just possibly, answer some of the points that my hon. Friends the Members for Fulham (Mr. Raynsford) and for Derby, South (Mrs. Beckett) have tried to put to him during the debate. They are serious matters and we bring them to the House because they have been brought to us by our constituents and people in other parts of the country.
The hon. Member for Kensington (Sir B. Rhys Williams) was talking about poverty levels and the way in which the social security system has not solved poverty in this country. Indeed, the poverty trap is perpetuated by some of the measures before us tonight. Any examination of social security legislation since it was introduced after the war will show that supplementary benefit, which was meant to be a safety net, has now become the staple existence of millions of people in this country. Nine million people in Britain are living below supplementary benefit level, and, if one takes the EEC poverty level, which is 140 per cent. of supplementary benefit, one is talking about several million more in what is, after all, supposed to be the seventh richest country in the world. Matters will get worse when the Social Security Act 1986 is finally put into operation bit by bit rather than get any better.
We should examine the measures we are being asked to agree tonight. Obviously I welcome any increase in child benefit. Who would not? However the number of children living in serious poverty at present is very large. DHSS figures alone admit to 400,000 children living below supplementary benefit level in 1983. Several hundred thousand, if not millions more, live below EEC recommended poverty levels. In all conscience I ask the Minister whether the increase in child benefit does any more than go some way towards redressing the cuts that have already been made in the past few years? Is he not aware that child benefit is the most effective way of getting real benefit to the poorest families. It is more effective than

cuts in taxation or any other method. I think that the Minister probably agrees with that, but whether he is prepared to say so is another matter.
My hon. Friend the Member for Fulham knows far more about housing benefit and understands the housing benefit system better than I do and, I suspect, better than the Minister. In fact, I wish that my hon. Friend the Member for Fulham was the Minister instead of the present incumbent. We will have to wait for an election for that to happen. It is important for the House to understand that the housing benefit system has continually reduced the amount of real benefit available to people living in very great poverty by the changing of the tapers that has gone on continuously. The other side of that, which is of great concern to many people, is that when they are in receipt of housing benefit and there is a direct payment through to the local authority for that benefit from their supplementary benefit problems occur. Due to staff shortages and inefficiency within the DHSS there are frequent problems about payments getting through. That results in the local authority concerned believing those people are in rent arrears. I have tried many times to get an accurate assessment of the figures involved. However, I suspect that the Government's continual attacks on mainly Labour controlled local authorities for the level of rent arrears has something to do with non-payment of moneys owed to local authorities by the DHSS in respect of rent through housing benefit. Will the Minister look into that problem because he has not done so up to now?
While he is doing that, will he look into the future a little bit. Under the Social Security Act 1986 that he so avidly supports and that will come into operation, those people on housing benefit will have to pay a proportion of their rates. In areas such as that which I represent the rates are high. I am not proud of that and nor is the local authority—[Interruption.] Nobody is proud of the fact that the rates are high. The rates are high because of the amount of rate support grant that has been cut from my local authority in the seven years since the Government came to power. Conservative Members well know and understand that, and if they bothered to examine the books of inner urban local authorities they would begin to see some of the problems that those local authorities and the people within them suffer.

Mr. Raynsford: I respect my hon. Friend's suggestion that Conservative Members should study local authorities' books, but would it not be more appropriate if they urged their colleagues in the Department of the Environment to ensure that they act legally in future in setting the rate support grant?

Mr. Corbyn: My hon. Friend is correct. It ill becomes the Conservatives, who lecture the Opposition on law and order, to have to admit that they have been breaking the law for years. Far be it from me to want anyone to be punished with the full force of the law, but if its full force can be used against miners and printers, why should it not be used against Tory Ministers?
The third area—

Mrs. Beckett: Perhaps my hon. Friend did not hear the rather ill-mannered interjections of the hon. Member for Stockport (Mr. Favell) about jobs for the boys. Perhaps my hon. Friend would like to comment on the money that has been given to the City, the jobs for the City boys and


the finance for the boys who support the Conservative party and the Government, who are the most corrupt Administration that we have known for 20 years.

Mr. Corbyn: I am grateful to my hon. Friend for her intervention. I had not heard the interjection from a sedentary position of the hon. Member for Stockport (Mr. Favell). If the hon. Gentleman is making allegations or accusations about the way in which local authorities employ people, he should examine the recruitment method of authorities, especially in inner London. They are trying to ensure that racial and sexual discrimination are not practised. They are trying to ensure that genuine, real jobs are created by meeting the needs of inner urban areas. It ill becomes a Government who have poured out so much in tax handouts to the super rich and poured so much money into the City to lecture local authorities about efficiency and jobs for the boys. If the hon. Gentleman reflects, he might regret having made such remarks.
The abolition of the middle rate of statutory sick pay will affect about 400,000 payments per year. Statutory sick pay exists because recipients need to maintain some standard of living while they are sick. The Government are punishing individuals for being sick and off work as a result of it. Does the Minister realise the fear that increasingly is with many about the lack of sick pay from their employment, including those who have not completed a certain amount of service? I have met constituents who have pleaded with their doctors, who have wanted to sign them off work, to allow them to remain at work by not signing them off. They have done so because they knew that their sick pay would be insufficient or because they knew that no sick pay would be paid. They have not wanted to see their family in poverty or fall behind with rent, mortgage, and hire-purchase payments. If we are to live in a caring society, the order relating to statutory sick pay must be rejected emphatically.
When the Social Security Bill, as it then was, was being considered in Committee, we discussed briefly the efficiency or otherwise of the delivery of benefits and the effect of various uprating orders. It is interesting that the Greater London citizens advice bureau has conducted a survey on the performance of DHSS offices. I hope that the results of the survey have been sent to all hon. Members, including the Minister, and that the Minister has read it and will respond. The survey says:
that nearly three-quarters (74%) of all offices failed 'very frequently or frequently' in their statutory responsibility to assess and pay benefit in 14 days. There were also alarmingly high figures for frequent or very frequent incidences of the following problems: errors in claimants benefits (62%), mislaid papers causing delays (91%), delays in visiting claimants (85%), claimants having to wait more than an hour to be seen (94%)".
The CAB report recommends that action should be taken in improving contact with the DHSS and improving reception areas, improving methods used in providing emergency services and assessment and in dealing with instances of urgent need, improving specialist services, improving the system that is used to clear up backlogs and improving the retrieval system.
At the heart of these problems is the level of staffing in DHSS offices and the inadequate training that many staff receive. I have taken the trouble to visit DHSS offices to discuss these matters with staffs. Many recruits enter the

DHSS with a determination to do something to implement the existing system. They may not be very happy with the system, but they recognise that it does something for those in their area and they feel a natural sympathy for claimants. They find after a few months that they feel brutalised because of staff shortages and other problems. The result is quite serious incidents of violence in DHSS offices. I totally deplore that violence. The real culprits are not those who sit on either side of the glass partitions but those who sit on the Government Front Bench and in the DHSS offices. I hope that the Minister will look seriously at the CAB's report, discuss it with the CAB and make improvements in those offices.
I asked a question about the number of social claims that have been referred to out of town offices from London. I asked it because staff in the DHSS offices in my constituency had raised these matters. Two weeks ago, there was a dispute at Archway Tower. I attended the picket line and discussed the issues with the staff in dispute. On 17 December, I received the Minister's answer to my question, which stated:
arrears of claims for single payments in some London offices
will be
dealt with by outstationed units in Chatham and Broadstairs.
I was told that a number of those claims had been dealt with. It is unsatisfactory for the DHSS to be dealing with a backlog of cases from inner urban offices—in this case London; no doubt, it happens elsewhere—in out of town offices as a way to save money, because London weighting is not paid. The Department is removing cases from the local offices which should deal with them. Ministers should understand the trauma that people suffer in trying to get single payments and have their cases dealt with and the people who turn up absolutely penniless in my office and at that of my hon. Friend the Member for Fulham because of lost papers, misplaced files, and so on. That is not usually the fault of DHSS staff. It is the fault of decisions deliberately to understaff those offices and make them such appalling places. I hope that the Minister will seriously and sensitively approach the problem.
We are being asked to approve these uprating orders. They in no way meet the problems of poverty that are the lot of so many people as we approach Christmas. They in no way meet the real needs of people. We need a Government who will be concerned about eliminating poverty rather than about marginalising, managing and condemning poverty, which is what the Government have done.

The Parliamentary Under Secretary of State for Health and Social Security (Mr. Nicholas Lyell): On the whole, this has been a good-natured and thoughtful debate. I hope that the Opposition will listen thoughtfully to some of the points that I make in reply as I argue the Government's case and express more of an overview than the hon. Member for Fulham (Mr. Raynsford) has in any of his recent speeches. May I respectfully say that he gets somewhat on tram lines in his argument. I suggest that he applies his very able brain to the yawning gap in the Labour party's case, which I hope briefly to expose.
I reject the general criticism made by the hon. Member for Derby, South (Mrs. Beckett). It is not true to say that, since 1979, there has been a decline in the standard of


living of those out of work. The hon. Lady rightly qualified her position with what are not perhaps weasel words but are at least curious words. She qualified it by saying that, of course, this was in comparison with those in work. That is why there is such a yawning gap in the Opposition's argument.
Before answering the specific points raised by hon. Members, including my hon. Friend the Member for Kensington (Sir B. Rhys Williams), I shall consider our overall social security spending. When we are criticised for spending too little, it is right that the House and the country should remember that there has been a massive 35 per cent. increase in spending on pensions and benefits by the Government since 1978–79—£11 billion in real terms. Most of that expenditure relates not to unemployment but to increases in the number of payments to the elderly, the long-term sick and the disabled and to the £4·5 billion real increases in the average overall benefit paid, particularly to low-income families in work and those categories to which I have referred.
Britain's position should be compared with that of other European countries. The proportion of gross domestic product spent on support of the elderly is the third highest in Europe. The only countries that do more are France and Denmark. Indeed, the latest figures that we have from France relate to 1983, the height of the French Government's Socialist experiment from which they had to renege so rapidly in more recent years. Those countries exceed our provision only by exacting far higher taxes and contributions from those who have to pay for the benefits.

Mr. Corbyn: I am interested in the Minister's comments. Can he compare the levels of pension payments in all European contries? If he did that, he would find that the British level of standard old age pension is among the lowest of all the EEC countries. The level of poverty among British pensioners is one of the highest.

Mr. Lyell: If the hon. Gentleman were to make a study of that, he would realise that the narrow way in which he has asked his question ignores many aspects of the benefits and other measures of support received by the elderly in this country. He is mistaken if he believes the point that underlies his question.
We must balance what we spend with what we expect the working population to pay—the amount that we expect them to meet in the costs of that expenditure. For example, a married man with gross earnings of £150 a week—that is not far short of three quarters of average earnings and fairly close to the average earnings of a manual worker—pays at present £13·50 a week in national insurance contributions and more than £23 a week in tax if his wife does not work. That is five times the amount that the same man would receive in child benefit if he has one child and is close to the total of the current rate of basic retirement pension for a single person.
The large increases in benefits argued for so vehemently by some hon. Members and especially by the hon. Member for Oldham, West (Mr. Meacher) and picked up, by implication, by the hon. Member for Derby, South would mean increases in that man's contributions and taxes as well as in those of better-off workers.
We believe that it is fairest to all to limit the burdens that we place on those in work and on employers while still protecting those dependent on social security benefits against rises in the cost of living as we have done. The proposals achieve that balance.
The hon. Members for Fulham and for Derby, South should examine the fundamental weakness of the Opposition's case. It is curious that we have heard nothing from the hon. Member for Oldham, West about uprating, but I will pick up the points that he made in our earlier debate this evening, which underlie the comments made by the hon. Member for Derby, South. The Opposition's proposals—the £3·5 billion or £3·6 billion, all to be taken from the rich—do absolutely nothing for the poor.

Mr. Raynsford: rose—

Mr. Lyell: I will give way in a moment when the hon. Gentleman has had a chance to listen to what I have to say. We heard a great deal about the promised £5 and £8 increase in basic pension, the £3 that is to be added to child benefit and the extension of the long-term rate of supplementary benefits for the long-term unemployed and we heard earlier the claim that Labour can finance that by taxing £3·6 billion from the supposedly very rich. However, we have yet to hear, despite the repeated demands from myself and my hon. Friend the Minister, a clear explanation of the details—or perhaps I should say the major aspects of that proposition. Does the hon. Member for Oldham, West intend to raise supplementary pensions in line with retirement pensions? I would assume that he does and that is the only way to ensure that the poorest pensioners gain least from the increase. I would assume that he would also want to increase the children's scale rates in supplementary benefit in line with child benefit for the same reason and housing benefit in line with both. If so, and the hon. Member for Fulham may realise this—

Mr. Raynsford: Will the Minister give way?

Mr. Lyell: Not just yet. The hon. Gentleman must accept that the costs of the proposals would not be £3·6 billion but £4·6 billion. Many pensioners on supplementary benefit and families on low incomes will be interested to learn that Labour's much-vaunted generosity consists of giving with one hand and taking away with the other.
Perhaps after Christmas the hon. Gentleman would also like to explain, for the benefit of widows and the long-term sick and disabled, what he intends to do about the benefits that they receive which are at present linked to the rate of retirement pension. His response and the hon. Lady's speech have demonstrated that a grasp of the realities of public expenditure are not their strong point. If they were given the chance to put their plans into action, they would cost, not £3·6 billion, but £5·6 billion. I am interested to hear what the hon. Gentleman is so keen to tell me.

Mr. Raynsford: I am happy that the Minister should give way. It ill becomes a Minister who is once again justifying fiddling the uprating formulas to make £40 million from cuts in benefits to poor people to attack the Opposition for the implications of putting their formula for helping poor people into practice. Earlier, the Minister took great credit for the additional expenditure that the Government have provided—I grant that they have—on social security. That is because the number of people in poverty and dependent on social security has increased. If he takes so much credit for that, why do the Government use the increase in expenditure on housing benefit and single payments repeatedly as an excuse for cutting them?

Mr. Lyell: It is noticeable to the whole House that the hon. Gentleman did not answer my question.

Mrs. Beckett: Will the Minister give way?

Mr. Lyell: Yes, in a moment. Perhaps the hon. Lady will listen for a second.

Mrs. Beckett: I have been listening for quite a long time.

Mr. Lyell: If the hon. Lady knows the answer, perhaps I shall let her speak.

Mrs. Beckett: I have listened with great care to what the Minister has said. He seems to be under a misapprehension. We are debating the uprating under this Government, not the uprating that the next Labour Government propose to introduce. [Interruption.] The Minister for Health should have a little patience. He attends these debates rarely and, perhaps, does not understand. If the Minister cares to read the record he will see that we have frequently given the answers to the questions he asks. Perhaps he would now like to answer the question that we have asked him consistently—

Mr. Colin Moynihan: Give us the answer.

Mrs. Beckett: Wait a minute. If, as the Minister argues, the sum of £3,600 million is inadequate to meet the cost of the £5 and £8 increase for pensioners, what size of an increase would it meet? Will he now tell the House why the Government gave them 80p instead of whatever they think £3,600 million from the wealthiest taxpayers could afford?

Mr. Lyell: It is interesting that the hon. Lady was so keen to dodge answering the question. That is how the Opposition deal throughout.

Mr. Raynsford: These are the Government's regulations.

Mr. Lyell: I refer the House and anybody who may be listening to the article,
How Labour will pay the bill.

Mr. Raynsford: Answer the question.

Mr. Lyell: I shall answer my question in a moment. The Guardian on 24 October carried an article on how Labour would pay the bill. This is a classic example from the hon. Member for Oldham, West. The answer is that Labour will not pay the bill. The article states:
we are adamant that beyond our two central overriding pledges, no other commitments can be guaranteed until the books are opened on coming into office.
[HON. MEMBERS: "Ah."] The fact is that £3·6 billion will do nothing for the poor. The fundamental argument of the hon. Lady's case that a Labour Government will uprate the pension—

Mrs. Beckett: £1, £2, £3, £4? How much money will it give them?

Mr. Lyell: I do not think that the hon. Lady understands the point.

Mrs. Beckett: Yes I do.

Mr Lyell: Everything in ordinary child benefit or ordinary pension is clawed back unless the supplementary pension, child scale rates and so on are increased. I invite the hon. Lady to read my speech and to invite her hon. Friends, including the right hon. Member for

Birmingham, Sparkbrook (Mr. Hattersley), to study it. They will find that the money is all clawed back. It means nothing. That is the yawning gap in the Opposition's case.
Now I shall answer the points made in greater detail by hon. Members and my hon. Friend the Member for Kensington.
With regard to statutory sick pay a point was made concerning losses. However, no acknowledgement was made by the hon. Lady or others of the transitional protection for all those who are currently at the middle rate. Even when there are those who theoretically have losses, it does not necessarily mean that employees will get less. We have encouraged occupational sick pay schemes, and statutory sick pay has stimulated such schemes. If we go back to 1977, 80 per cent. of people were in such schemes and we know that the figures have significantly increased.

Mrs. Beckett: Will the Minister give way?

Mr. Lyell: In a moment.
With regard to housing benefit, the fact is, as we have said often, that it does go too far up the income scale. It is nonsense that 7 million households, something like a third, should receive housing benefit. I know that this is delightful for the hon. Member for Fulham, as he has spent his entire professional life in this work and he certainly understands it. Figures like 44p or 84p roll off his tongue. I respect him, but I would respect him more if he examined the weaknesses in his case instead of nitpicking around the details.

Mr. Raynsford: Will the Minister give way.

Mr. Lyell: In a moment, but let me just finish my point.
Most losers lose less than 25p. Those who lose more are generally those who are at the upper end. All those who lose are on incomes that are above supplementary benefit level. I am sure that that would be acknowledged by the hon. Member for Fulham.

Mr. Raynsford: The Minister has said that housing benefit goes to too many people. Does the same logic apply to mortgage interest tax relief? That also is a housing benefit that goes to rather more people on higher incomes. If it is appropriate to make cuts, would it not be more appropriate to make them from that benefit, which goes to higher income groups, rather than from poor people who depend on housing benefit to meet their housing costs.

Mr. Lyell: I am glad to acknowledge one thing and that is that the hon. Gentleman has made clear time and time again his anxiety to get his hands on mortgage interest tax relief. He is anxious to get hold of that money.

Mrs. Beckett: rose—

Mr. Lyell: I will give way.

Mrs. Beckett: May I take the Minister back to something a little less exciting to his hon. Friends? Did I hear the Minister correctly? I think that he said that statutory sick pay had stimulated the development of occupational sick pay schemes. That cannot possibly be true and I would like to know what evidence he has for that. As far as I can recall, the last data available on occupational sick pay schemes were published in 1977 and relates to 1974. That was, in any case, before the statutory sick pay scheme was introduced. There is no new evidence


about occupational sick pay schemes unless the Minister has some new fund of evidence that he has not made available?

Mr. Lyell: The point that I was making—obviously I have not made it sufficiently clear for the hon. Lady—is that although we do not have a complete survey—80 per cent. of people had schemes going back to the 1977 figures which go back to 1974. We are aware that there have been substantial increases since then and we believe that statutory sick pay has been a significant influence on that growth.

Mrs. Beckett: Will the Minister give way again?

Mr. Lyell: No I must move one.

Mrs. Beckett: Be fair, give way.

Mr. Lyell: Very well.

Mrs. Beckett: How can the Minister possibly say that there has been a substantial improvement if the last evidence that we have is from 1977? He must justify such a statement being made to the House.

Mr. Lyell: If the hon. Lady goes on intervening too much she will find that I get armed with fresh material. Without going into too much detail I refer the hon. Lady to a study completed by Income Data Services published in June 1984 which considered the matter. I am very surprised that the hon. Lady was not aware of it. I advise the hon. Lady, once again, to look, rather more carefully at the yawning gap in her own case rather than spend time on the kind of minute detail that has been the substance of her speech.
The hon. Lady was again wrong to suggest that heating allowances had been uprated on the basis of a stale and outdated measurement period. Far from being outdated and stale, it is the most recent possible—from January to September 1986, during which time fuel prices fell by 0·1 per cent. One can hardly get more stable than that. The higher rate heating additions increased in July, and the money is now in pensioners' hands. I should have thought that she would have noticed and applauded that.
On child benefit, the hon. Lady quite reasonably asked how people would get a form when maternity grant ends. The Government are anxious that people should know about and understand the benefits that they should get, and we are taking a great deal of trouble to improve our forms. Six of them have now won plain English awards. There will be a tear-off coupon on the leaflet entitled, "Babies and Benefits", which all mothers can pick up at antenatal clinics. I suggest that that will be an extremely helpful method.

Mr. Corbyn: The translation of information and forms was mentioned in the then Social Security Bill Committee. What progress has been made with a multilingual approach to giving benefit information and advice?

Mr. Lyell: I am not omniscient. While I know that we are giving that matter careful thought, I cannot say how many languages are involved.
My hon. Friend the Member for Kensington, and later the hon. Member for Islington, North (Mr. Corbyn), asked about the London citizens advice bureau report. I was in King's Cross and Camden seeing the citizens advice bureaux only last week, when I discussed the very topics that are dealt with in the report.
It is simply not right to describe the overall position as chaos. Weekly benefits, which are the fundamental income support—to use the new term—of millions of people, are being paid efficiently, week in, week out in the overwhelming majority of cases. I do not deny that there have been pressure points. There have been take-up campaigns. We are not opposed to take-up campaigns as long as they are properly liaised and dealt with. Our objective is to deliver benefits as swiftly, efficiently, carefully and effectively as possible.
There have been pressure points, but we have been acting on them—not since we received the report, which was only yesterday, but since the beginning of the year. Moreover, the interim staff complement increases have been taking effect since May. They have helped significantly to overcome backlogs. Almost all of the 5,175 extra staff are in place. There are still one or two offices in which we are trying to build up to the complement, but most are in post.
My hon. Friend the Member for Kensington will approve of the fact that we are in the process of major social security reforms in the shape of simplification, common methods between benefits, which will be of great help, and computerisation. We have local office microcomputer projects, which help people to deal with cases more quickly and trace papers, and—which is even more significant in the long term—computerisation in the local office project. The system is wholly suitable for computerisation. It is the largest computerisation in western Europe. It is much larger than the NASA computerisation and should be completed between now and 1992. It is an important and valuable advance.
The hon. Member for Islington, North should not criticise outstationing. At Chatham and Broadstairs only the backlog in some cases of single payment schemes have been outstationed, and that has been done simply to help the staff to get through the work more efficiently and to get benefits delivered to those entitled to them in the inner cities. I say in all sincerity that it is a sensible policy, and competent staff in the inner cities have nothing to fear for their jobs.

Mr. Corbyn: While my question about outstationing related to the office in my constituency, there are wider implications. Is the Minister aware that the trade unions representing the civil servants who work in the DHSS have made representations continuously about staff shortages and the problems they face over the backlog under the single payment scheme? Is he further aware that the outstationing of that work merely deals with an immediate crisis whereas there is a long-term problem involving levels of understaffing in many inner city offices?

Mr. Lyell: I repeat that outstationing is helpful and that staff have nothing to fear. I should be happy to talk to the hon. Gentleman about the matter, and I hope we shall get his encouragement because the policy is designed to help his constituents.
The growth of personal pensions, occupational pensions and the overall benefits for the elderly that are likely to result from our schemes will be helpful.

Sir Brandon Rhys Williams: Will my hon. and learned Friend give way?

Mr. Lyell: Yes, but after this intervention I must conclude.

Sir Brandon Rhys Williams: I wish to pay tribute to the staff, particularly of inner London offices. They do a stupendous job and perhaps only British civil servants can make the system that we are now using work as well as it does. But like Galileo, I have to say, "Eppur si muove." The fact is that the system is breaking down. My hon. and learned Friend can say what he likes, but we cannot go on as we are.

Mr. Lyell: My hon. Friend is not giving credit for the great efforts that are being made, though I appreciate that he speaks with sincerity on this subject.
The provisions of the orders and regulations strike a fair balance. The value of the main long-term benefits is being protected without major increases in the contribution burden on the working population and the structure and administration of the social security system is being progressively simplified and improved.
To those such as the hon. Member for Derby, South who demand higher benefit increases I must point out that social security spending has, as I said, increased since 1978–79 by over 35 per cent. in real terms. I ask the House to reflect on that and on the Government's achievements in the sphere of social security and to support the orders and regulations.

Question put and agreed to

Resolved,
That the draft Social Security Benefits Up-rating (No. 2) Order 1986, which was laid before this House on 1st December, be approved.—[Mr. Major.]

SOCIAL SECURITY

Resolved,
That the draft Supplementary Benefit Uprating (No. 2) Regulations 1986, which were laid before this House on 28th November, be approved.
That the draft Family Income Supplements (Computation) (No. 2) Regulations 1986, which were laid before this House on 24th November, be approved.—[Mr. Major.]

TERMS AND CONDITIONS OF EMPLOYMENT

Resolved,
That the draft Statutory Sick Pay (Rate of Payment) Regulations 1986, which were laid before this House on 1st December, be approved.—[Mr. Major.]

SOCIAL SECURITY

Resolved,
That the draft Social Security (Contributions, Re-rating) (No. 2) Order 1986, which was laid before this House on 24th November, be approved.
That the draft Social Security (Treasury Supplement to and Allocation of Contributions) (Re-rating) Order 1986, which was laid before this House on 24th November, be approved.—[Mr. Major.]

STATUTORY INSTRUMENTS &c.

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments &amp;c.)

ANIMALS

That the draft Welfare of Livestock (Prohibited Operations) (Amendment) Regulations 1986, which were laid before this House on 4th December, be approved.—[Mr. Garel-Jones.]

Question agreed to.

Third World Debt

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Garel-Jones.]

Mr. Colin Moynihan: It is fitting that one of the last debates in this House this year provides us with an opportunity to be forward looking—a chance to draw together opportunities which present themselves for a rare synthesis of altruism and self-interest in the exercise of the power of Government.
To responsible Third World Governments their new task in the coming year must appear daunting indeed. There is an overhang of debt initially increased by overenthusiastic lenders who too frequently over-extended their lending programmes without adequate project preparation and evaluation. Additionally, many developing countries, particularly in sub-Saharan Africa, have severely limited manpower resources on which the donor community places an enormous burden on a relentless roller coaster moving from donor meeting to donor meeting while political pressures at home continue to build up in their absence.
Nor can Third World Governments find much solace in the patchwork quilt of rescheduling measures they are forced to adopt, including conditionality which too frequently appears to sacrifice the painful social policy implications at the altar of severe austerity programmes. Such programmes do little more than buy time—time during which agricultural prices are often forced down by excessive subsidisation and protection from the very Governments whose representatives in long and hard negotiations with developing countries pontificate over the evils of protectionism.
Compound the constraints to development by adding high real interest rates, the prospect of increasing protectionist pressures and the lack of implemented new initiatives to resolve the debt crisis and the prospects of a serious collapse in the international banking community remains a reality. However, there are opportunities to tackle these challenges, but they will require far more political will by donor Governments and the banking sector than has been revealed to date. Among initiatives I hope to see are more debt-equity swaps and interest capping and, where appropriate, the subsidisation of spreads. However, to achieve growth and particularly private sector-led growth, not only will the appropriate macroeconomic framework be required, but new initiatives to permit dramatic reductions in debt will be essential.
I shall outline to the House tonight the predicament of a model Third World Government—one that has followed every international policy prescription issued to it, that is democratic, steadfast of purpose and dramatically successful in the achievement of its principal objectives, yet is still unable to lift its people from the doldrums of poverty and deprivation in which they have languished for several decades because of the overhang of international debt incurred by earlier less democratic and less sanguine regimes. I shall ask Members to stifle the yawn which precedes the anticipated profferment of the Third World begging bowl while I update them on another crisis, related, but this time closer to home, and perhaps closer to their hearts.
A few years ago, cocaine was an obscure drug, used by the rich and the exotic. It is no longer. Cocaine abuse is now the fastest-growing narcotic problem in Britain and other Western countries. Use of the drug has spread from the penthouse to the street. The explosion of cocaine use in Europe and north America has been mirrored by the growth in illict coca cultivation in Bolivia—from a few hundred million dollars worth in 1980 to $2,500 million worth in 1986, with Bolivia currently providing 30 per cent. of the cocaine entering Western Europe. The combination of a strong Government in Bolivia, the vulnerability of that Government to the debt crisis and Bolivia's key role as a supplier of cocaine paste to the international narcotics industry provides a unique window of opportunity for action by the Western powers, hopefully, under the leadership of Great Britain.
I am personally convinced that the opportunity now presented allows a bold new initiative which will tackle a pressing social problem in Britain and other Western European countries, while producing entirely desirable development effects in a deserving Third world country.
Allow me, Mr. Deputy Speaker, to set the scene for the benefit of those hon. Members who are unfamiliar with the details of the Bolivian situation. As recently as July 1985, inflation in Bolivia was running at the almost unprecedented level of 23,000 per cent. per annum. Remember the chaos caused here not long ago by just 23 per cent. inflation and begin to imagine the paralysis induced by 23,000 per cent. Think for a moment of the totalitarian solutions that historically have been imposed as a result of far less severe inflations and marvel then at the achievement of a democratically elected Government in Bolivia in reducing this inflation in six months to a manageable 39 per cent. per annum. The Paz Estennsoro Government have had a remarkable term of office to date, with an economic programme brilliantly conceived by Ministers Juan Carriaga and Gonzales Sanchez de Lozada.
Of course, this stupendous achievement has not been without cost in terms of domestic hardship, and the Bolivian Government must be acutely aware of the need to deliver on their promise to reactivate the economy, and to alleviate the deprivation caused by the economic adjustment programme which has led to thousands being made redundant, while reducing the real income of tens of thousands more whose jobs have survived.
Bolivia is a country blessed with an abundance of natural resources, but the debt-service burden, and the country's pariah status in international financial markets as a result of repayment arrears, have prevented it from raising the capital to exploit its natural wealth. Bolivia's international debt is minuscule by comparison with Latin America's over-borrowed giants. Its $2·5 billion debt, of which $800 million is commercial, pales into insignificance alongside the $300 billion combined total of Brazil, Mexico and Argentina. Yet Bolivia's prospects of being able to redeem its debt are non-existent by comparison with its more indebted but much richer and bigger neighbours. The international financial community has long since discounted its Bolivian debt, which currently trades in the London secondary market at 8 to 10 cents to the dollar, yet has lacked the initiative to find a way out of the impasse without creating the banker's nightmare—a precedent. International bankers frown upon the

repurchase of debt at a discount by the debtor, but are benevolent towards the same exercise by third parties, such as the Governments of Western countries.
The Government of Bolivia have prepared a bold programme for the elimination of the non-traditional, or cocaine-oriented, coca crop, and are determined to push this through despite the economic impact of the eradication of by far the most important industry in a country which is, Haiti aside, the poorest in the western hemisphere.
The Government's programme, recently presented to special meetings of the United Nations and the World Bank, calls for about $200 million over three years in international aid to finance an imaginative and soundly based programme of drug traffic interdiction, crop eradication and alternative development. The Governments of Western countries, if their anti-narcotics policies are to mean anything, will have to participate in, and largely finance, this progamme. There thus arises an opportunity to link debt to drug eradication and to solve two problems at once.
My proposal is essentially this. Rather than donate the money needed to finance the Government of Bolivia's drug eradication and alternative development programme outright, let the Western Governments most affected by the cocaine problem buy Bolivia's commercial debt at a deep discount from the commercial banks which now hold it. Let the Bolivian Government buy back their debt from the Western Governments in Bolivian pesos, which the recipients would agree immediately to re-deposit in the narcotics action fund to underwrite the Bolivian Government's three-year action programme. Relieved of the burden of debt service and amortisation, the Bolivian Government could find the funds to finance the drug eradication programme in this way.
The programme can be non-inflationary if, relieved of the need to service debt, or buy in paper from the secondary market, which the Bolivian Government are preparing to do anyway, the Government of Bolivia can find the peso funds over a three-year period for the drug eradication programme. In this case, they hand over the cash for the outstanding debt, knowing that they will get pesos straight back for the narcotics programme. Moreover, and possibly more important in this case, with capital flight from the cocaine trade estimated at 85 per cent. of the street value of cocaine, approximately $300 million per annum is currently being illegally reinvested into the economy, the larger proportion of which generates domestic demand in essential purchases for the campesino farmers. During the three-year period of an eradication campaign, this income will more than offset the cost of the programme and arguably have a deflationary impact on the economy in the medium term if the programme succeeds.
I have discussed this programme at length with senior economists at the World Bank, where, during part of the summer recess, I worked as a consultant on the Bolivian medium-term economic strategy, and with leading figures in the Bolivian Government. Furthermore, I have acted as an adviser to the private sector in the preparation of a reactivation programme, a Confederation de Empresarios Privadeos, energetically and inspiringly led by Carlos Itturalde. However, most important, I have had the pleasure and privilege of discussing this proposal with five Treasury officials, and as yet have heard no substantial argument against it. It offers a solution to the impasse of


the Bolivian debt—a way out of the precedent trap which the bankers so fear, for the conditionality which Western Governments would attach to their purchase and resale of the Bolivian debt would be unacceptable to any other Latin American Government except Bolivia's political gravity-defying regime. It offers at the same time a way of funding a relatively cheap and critically important Third world development programme with profound implications for the social cohesion of the developed Western economies.
The resolution of the commercial debt crisis will give Bolivia renewed access to international capital markets and the ability to fund the development of its huge natural reserves. The elimination of its narcotics industry will reestablish its sense of national morality and purpose, and will make a major contribution to the elimination of the cocaine menace in the developed western economies. Alternative and comparable schemes can be developed using export credits or swapping debt for private sector participateion in deregulated and overvalued loss-making parastatals which could benefit from short-term international management contracts.
As recognised at the Williamsburg, summit, new and workable arrangements for servicing and tackling debt are required. Constant piecemeal rescheduling will severely restrict the capacity of recipient Governments to invest for development and growth and the corresponding lack of political stability will reduce confidence for the much needed private sector reactivation. There can be no doubt in this Chamber that there is little chance of bridging the north-south divide, or of avoiding a repetition of the appaling famine and poverty in sub-Saharan Africa unless we are prepared to act and substantially reduce the transfer of the meagre financial resources of the developing countries to the West.
My main thrust has been on debt development swaps, perhaps better understood as a debt-drug initiative or as a mechanism for financing development programmes.
In this respect, the current political and economic climate in Bolivia offers us a window of opportunity. This happy coincidence of interest between one of the poorest and most deserving of Third World countries and the developed economies must not be allowed to pass.
I seek an assurance from my hon. Friend the Economic Secretary that the Government will investigate with all speed this proposal for debt-development swaps for Bolivia, and will ensure that our Government will play a leading role in seizing imaginative, original and mutually beneficial solutions to the twin problems of debt and drugs.

The Economic Secretary to the Treasury (Mr. Ian Stewart): I begin by congratulating my hon. Friend the Member for Lewisham, East (Mr. Moynihan) on obtaining this debate and on his speech. Before I respond to his interesting proposal, I shall say something more generally about the crucial problem of world debt, the subject with which he opened his remarks.
There is no doubt that the debt problem remains severe, although developments over the past year have had mixed effects on individual debtor countries. For instance, the fall in the US dollar helped those with a high proportion of debt denominated in dollars. Falls in the oil price have

caused severe problems for some oil exporters including Mexico, Nigeria and Egypt while having a beneficial effect on most countries, but falls in other commodity prices have been a problem for nearly all debtors. The key action that we in developed countries can take in response is to pursue policies which will bring long-term sustainable growth in the world economy. We need to keep inflation down, and we need to take steps to keep markets open in the face of increasingly protectionist pressures, particularly in the United States.
I am glad to say that major countries are increasingly co-ordinating their policies to bring about growth. For instance, at the Tokyo summit the seven leaders of the industrialised nations agreed new arrangements for closer policy co-ordination, while in October the United States and Japan were able to announce agreement on a set of joint actions designed to provide Japanese growth and reduce internal imbalances.
On trade liberalisation, we are also seeing progress. The GATT agreement in Punta del Este represented a real breakthrough. We have placed particular emphasis on the need for a reduction of subsidies and protectionism in agriculture. And I might add that at the Commonwealth Finance Ministers' meeting in September I found a warm welcome for the part Britain had played, through our presidency of the European Community, in bringing this into the GATT agenda. The potential gains to developing countries from liberalisation of agricultural policies are far larger than any possible increase in direct aid.
But within this context we also need specific policies on debt. At the IMF meeting in Seoul last year I strongly welcomed the initiative put forward by Mr. Baker and we have continued to give this our support. The Baker initiative calls for developed and developing countries, international financial institutions and commercial banks to work together. Efforts by the developing countries towards structural adjustment in their economies are matched by appropriate associated financing. Such changes in their economies are essential if these countries are to become creditworthy again and so attract voluntary lending. The policy changes and the financing package are designed on a case by case basis to match the varying debt burdens, economic structures and readiness to implement reform of the debtor countries.
There have been some suggestions that the Baker initiative has "failed" and that an alternative strategy is needed, but this is to misunderstand the nature of the initiative, which provides a framework rather than a specific model. The scheme was never intended to be an instant solution, and the progress so far is encouraging. The IMF and the World Bank have taken on the important role of working with the debtor countries to put together the packages of structural reform and new money. With only a few exceptions, the major debtors are co-operating with this approach. In return the World Bank has negotiated $3·7 billion in new policy based loans with 10 of the 15 major debtors and has discussions under way with other countries for a further $5 billion in lending. The developed countries can therefore also do their part by giving wholehearted support to these institutions.
I was very pleased to learn of the agreement reached on Monday this week on the eighth replenishment of the International Development Agency of $12·4 billion—a sum in excess of the $12 billion that we had hoped for. This will enable the International Development Agency to contribute further to resolving the problems of the poorest


of the debtor countries, including Bolivia. I am particularly glad that the United Kingdom was able to increase its contribution by $15 million.
The Paris club, where Government creditors meet to reschedule official debts, is making a major contribution in resolving the financing gap problems of debtor countries. The Paris club has shown its willingness to reschedule on generous terms, including up to 100 per cent. of principal and interest over 10 years. Between 1983 and the beginning of this year the Paris club had rescheduled over $32 billion for 32 countries, and in July of this year agreement was reached to reschedule Bolivia's debts.
Commercial banks are also moving in to support comprehensive policy reform programmes in the debtor countries. The essential point about the Baker Initiative is that it brings together all those with a stake in the debt problem and asks them to play a role which reflects their involvement. Therefore, debtor countries are asked to reform their policies rather than continue with those which contributed to their problems. Creditors—official, multilateral and private—are asked to provide financing in order to help the process of recovery in those economies in which they have a share.
We should be wary of new global solutions or solutions for individual countries which allow any of these participants to evade their responsibilities. All too many suggested schemes involve Governments taking on the risks of the commercial banks, or allow debtor countries to take financial help without the essential associated adjustment. Our ultimate aim must be to see international financial markets move towards operating, without Governmental or institutional intervention. Schemes for alleviating the debt problem must not lose sight of this.
What does all this mean for my hon. Friend's scheme for Bolivia'? First, we do not underestimate the challenge presented by the Bolivian economy. As my hon. Friend has said, since August 1985, President Paz Estenssoro has initiated wide-ranging and courageous economic reforms to tackle the formidable problems that he inherited when he came to power. In particular, the fall in tin and hydrocarbon prices has exacerbated the long-standing balance of payments problem. In the face of these reversals the Government have demonstrated a firm and admirable commitment to adjustment. They have collaborated closely with the International Monetary Fund and the World Bank which have assisted in the formulation of an economic recovery programme which the United Kingdom Government have supported.
Bolivia is one of the poorest countries in Latin America and is the largest recipient of United Kingdom technical co-operation in the region. An official mission from the United Kingdom visited Bolivia in October to identify with the Bolivian authorities key areas of the economy where we could assist Bolivia. We are considering proposals to make available a grant of up to £5 million in balance of payments support in the form of British goods and equipment. The primary requirement for the success of the economic recovery programme is the continued determination of the Bolivian Government to apply sensible and consistent economic policies.
There can no doubt that the present drugs problem in Bolivia is a threat to its viability as a nation. Bolivia is now the world's leading exporter of illicit cocaine and its Government's pledge to take the country out of the drug export business shows great courage. We applaud this step and we are contributing £600,000 to the United Nations

fund for drug abuse control in support of law enforcement programmes there, but the scale of the problem should not be underestimated.
The proposal put forward by my hon. Friend for dealing with the present burden of Bolivia's debt servicing difficulties is an interesting idea. As I understand it, the proposal envisages commercial banks selling to Governments at a very deep discount external loans which they extended to Bolivia in the past and which are now not being fully serviced. To this end discussions are taking place, I understand from what my hon. Friend has said, between the commercial banks and the Bolivian Government.
My hon. Friend's proposal goes on to assume that developed country Governments will somehow be persuaded to provide the necessary finance with which to pay off the commercial banks, and that the commercial banks will be prepared to take the balance sheet losses involved. It would replace substantial debts previously owed to commercial banks with an investment or loan—however one wishes to describe it—for a considerably smaller amount owed to these Governments. The Bolivian Government would then repay developed country Governments this smaller amount in pesos. The pesos would then be used as part of developed countries' help with the Bolivian drug eradication programme.
My hon. Friend is putting this proposal to me rather than to any of my colleagues at the Home Office or the Foreign and Commonwealth Office because of my responsibility for policy on debt. Therefore, it is as a solution to the debt problem that I must assess it, and not in terms of development aid or as a solution to the drugs problem. We therefore need to decide whether it provides a better use of developed countries' funds than our current approach to debt, both generally and in Bolivia.
First, as I have said, the Bolivian Government have made good progress so far in making key structural changes in their economy. We should encourage them further by providing finance in support of further such reforms. Secondly, to the extent that the commercial banks are unwilling to sell the debt back to Bolivia but are prepared to sell it to other Governments, it must be the case that they perceive a risk and a cost in selling to Bolivia which they do not want to bear.
If developed country Governments buy the debt, the banks would be passing that cost and risk on. That would go against the principle that all those with a stake in a particular debtor country should share proportionately in helping alleviate the debt. To go against that principle would be to set a dangerous precedent. The commercial banks would be even less likely to carry their share of the risk in future debt packages in other countries, and we would disrupt the process of returning international financial markets to working without Government intervention.
Therefore, if we are talking solely about a solution to Bolivia's debt problem, I am not convinced that my hon. Friend's scheme is a better use of developed country resources than the provision of new money within the policy framework that I have described earlier. I am not in a position to say whether my Home Office or Foreign Office colleagues would view this as a more effective use of their funds for drugs eradication or aid than the direct funding that they already provide. I also suspect that the


United Kingdom will not be alone among the developed country Governments in having some difficulty with the scheme.
Nevertheless, we shall be looking further at the proposal that my hon. Friend has put forward tonight and we shall consider it carefully. I would not want to rule it out completely at this stage. Certainly we would not want to stand in the way of such a scheme if the commercial banks were prepared to come to an arrangement directly with the Bolivian Government. We should not forget that the exposure of the United Kingdom banks to Bolivia commercial debt is only a small proportion of the whole.

We would have to work in very close co-operation with developed countries if any proposal along those lines were to be taken forward.
I would not want to leave the House tonight in any doubt about our commitment to helping eradicate drugs or to alleviating the debt problem. My hon. Friend's proposal shows great ingenuity in trying to bring those two areas together. I congratulate him on putting it forward for consideration both here and internationally, and I shall reflect upon what he has said.

Question put and agreed to.

Adjourned accordingly at three minutes to Twelve o'clock.